Hang Seng Bank's loan growth forecast dipped to 9.6% for 2014

But NIM jumped to 1.93%.

According to Maybank Kim Eng, NIM widened to 1.93% in 2H13 from 1.84% in 1H13.

Hang Seng Bank (HSB) may ride the steepening US dollar yield curve to improve its asset yield in 2014. 

Here's more from Maybank Kim Eng:

We raise our NIM forecast to 1.95% from 1.84% for 2014. However, loan growth moderated to 1.1% HoH in 2H13 in order to reduce its loan-to-deposit ratio to 70.5% in Dec 2013.

We lower our loan growth forecast to 9.6% from 10.1% for 2014.

Mixed picture in asset quality. The NPL ratio stayed at 0.22% in Dec 2013. However, HSB’s credit costs surged to 0.23% in 2H13 from 0.07% in 1H13.

This was mainly due to the increase in collective impairment charges for its credit cards and personal loans. Loan impairment charges in China also increased in 2H13.

We raise our credit costs forecast to 0.10% from 0.07% for 2014.

Low fully-loaded CET1 CAR. HSB needs to phase-in an additional capital charge for its non-bank subsidiaries in the coming years. Even if it disposes of its shareholding in Industrial Bank (IB) at the current price, management indicated its fully-loaded CET1 CAR will still be close to 11%.

Hence, it will be difficult to distribute the disposal gain of IB as a special DPS.