Citi sees margin headwinds, flat profit over FY24 for Australia's Liberty Financial

Liberty

28/02/2022 22:31

** Citi cuts price target on financial services firm Liberty
Financial Group  LFG.AX  to A$6.00 from A$8.10, but maintains
"buy" rating
    ** Brokerage sees a "perfect storm" forming for net interest
margin (NIM) as rising funding costs are not being able to be
passed on to customers due to competition from non-banking
financial institutions
    ** Expects NIM to retract 20 basis points by FY24; sees a
mitigation in improving loan volumes, as well as a flat profit
profile
    ** LFG reports https://ir.miraqle.com/DownloadFile.axd?file=/Report/ComNews/20220228/02492807.pdf
 1H22 statutory net profit after tax of A$116.5 mln ($84.58
mln), up 40%, and posts an increase in NIM of 7 basis points to
3.14%
    ** Brokerage cuts FY22 core net profit view by 7.1% to
A$225.9 mln, and by 6.8% to A$221.5 mln for FY23
    ** All five analysts rate the stock "buy" or higher; their
median PT is A$7.45 – Refinitiv data
    ** LFG down 14.5% this year, as of last close vs. a 5.9%
decline in the ASX All Ordinaries index  .AORD  


($1 = 1.3774 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))