STOCKWATCH: Wing Hang Bank -- 2 (interest margin estimated at 3.1 pct)

Wing Hang Bank fell 0.56% to close at 35.4 hkd on trade of 825,000 shares, Joanna Ng, a bank analyst with Dao Heng Securities, said she estimates Wing Hang Bank's interest margin at around 3.1 pct. "Compared with other small and medium sized banks, Wing Hang Bank has relatively higher interest margin. That's why the bank made such a good improvement in operating profit," Ng said. Wing Hang Bank posted 1.06 bln hkd in operating profit in 2000, compared with 825.82 mln hkd a year earlier. During the same period, the bank reported 1.65 bln hkd in net interest income, compared with 1.44 bln hkd a year earlier. Ng said Wing Hang Bank has a large portion of fixed rate loans which helped the bank to secure a higher interest margin. In fact, Ng said her forecast of 935 mln hkd in net profit was higher than the bank's actual figure of 901.18 mln hkd. "I think the higher than expected bad loan provision the bank assigned was the reason behind the difference between my forecast and the actual profit," Ng said. Ng said she previously expected the bank would make about 290 mln hkd in 2000, compared with the bank's actual provision 367 mln hkd. In 1999, the bank assigned 429 mln hkd in badloan provision. An analyst with a U.S.-based brokerage said the reduction in bad loan provision was in line with the economic recovery in Hong Kong. "The bank sector has been enjoying the improving economic conditions. Wing Hang Bank's results are no surprise to me," the analyst said.

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