Hong Leong Bank's core equity Tier-1 ratio to increase to 9.7% by FY15

Enough to meet any countercyclical buffers imposed by Bank Negara.

Nomura continues to like Hong Leong Bank for its ample liquidity (low LD ratio of 75% enables it to better manage its NIMs) and stronger cost efficiencies post its merger with EON Bank. 

Here's more from Nomura:

While it suffered a MYR1.6bn deduction for its investment in the 20%-owned Bank of Chengdu, we do not see any major issues in complying with Basel III.

We expect its RoRWA to trend higher to 2.0% by FY14F from 1.8% in FY12 on the back of a higher LD ratio (resulting in improved NIMs) and continued improvement in cost efficiencies.

By FY15F, we project its core equity Tier-1 ratio to increase to 9.7% from the current 8.6%, which should be sufficient to meet any potential countercyclical buffers imposed by Bank Negara, in our view.