LPB – Earnings Update – 20181029

• LPB is on track to achieve its revised earnings target for FY18F. The bank remains a solid dividend play despite weak earnings.
• Net Interest Margin (NIM) dropped 17bp qoq in 3Q18 as CASA continued to plunge. 9M18 net interest income fell 8.1% yoy on 60bp NIM compression.
• Net fee income grew robustly while other non-interest income stayed flat in 9M18. 9M18 operating expenses increased by 14.6% yoy due to network expansion
• There are signs LPB cut corners in provisioning to cushion weak results. LPB is on track to meet our forecast for the year.

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