We cut our target prices (TP) for all 12 banks under our coverage, driven by (1) a 12.2% decrease in our forecast for aggregate 2022-2026F NPAT, and (2) increases in our assumptions for cost of equity, which are partly offset by the positive impact of rolling over our target prices to end-2023. 

Our lower aggregate 2022-2026F NPAT is primarily due to (1) a downward revision in our projection for average NIM over this period from 4.16% to 3.97% following our more conservative assumption for the SOE banks to run support packages in 2023 in the face of economic challenges and the impact of our higher NPL ratio assumptions following the recent interest rate hikes in September and October 2022, and (2) an 18% upward revision in aggregate provision expenses.

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