Chinese banks announce yearly results
March 31, 2014 Category Finance, Weekly
The Agricultural Bank of China (ABC), the country’s third-biggest lender, posted a 14.6% annual increase in profit last year to CNY166.3 billion, thanks to robust growth in fee and commission income. The bank was the first among the top-five to announce earnings for 2013. Net profit growth was the slowest ever reported. Net fee and commission income rose 11% year-on-year to CNY83.2 billion, which accounted for 17.9% of operating income, 0.25 percentage points up from 2012. Net interest income rose 10% to CNY376.2 billion, but the interest margin dipped to 2.79% at the end of last year from 2.81% a year ago, as China accelerated interest rate liberalization. The non-performing loan ratio (NPL) improved from 1.33% at the end of 2012 to 1.22% in December last year. Fourth-quarter earnings fell 38.1% quarter-on-quarter to CNY28.2 billion because of slower credit growth. The bank’s capital adequacy ratio (CAR) stood at 11.86% at the end of last year, down from 12.61% a year earlier. The bank’s stock has fallen 13.5% in the past six months but is still the second-best performer among the Big Four.
The Bank of China (BOC) posted an 11% increase in fourth-quarter net profit to CNY36.7 billion, beating estimates. For 2013, BOC’s net profit rose 12.5% to CNY156.9 billion from CNY139.4 billion a year earlier. “The bank set clear priorities in a bid to comprehensively tighten risk control, paying particular attention to key fields including overcapacity industries, local government financial vehicles and real estate,” BOC President Chen Siqing said in the earnings statement. BOC’s bad loan provisions fell 15.7% year-on-year in the fourth quarter. BOC’s non-performing loan ratio was flat at 0.96% at the end of December compared with the end of September. Net interest income added 10.4% in 2013, while gains in net fees and commissions rose 17.4%. Its net interest margin was 2.24% at the end of the fourth quarter, compared with 2.22% a quarter earlier. Executives expressed confidence that the bank will get through the nation’s interest rate liberalization program with a competitive edge. As of December 31, 2013, Bank of China had extended loans of CNY853.5 billion to the real estate sector, local government financing platforms (LGFVs) and industries with severe excess capacity.
The Industrial and Commercial Bank of China (ICBC) posted a 10% annual growth in net profit last year to CNY262.6 billion, the slowest since it went public in 2006. Net fee and commission income at ICBC rose 15.3% year-on-year to CNY122.3 billion in 2013, which accounted for 21% of its operating income, up 1.11 percentage points from a year earlier. Net interest income gained 6.1% to CNY443.3 billion. ICBC’s net interest margin shrank from 2.66% in 2012 to 2.57% last year, further proof that China’s accelerating financial reforms hit its profitability. Its bad loan ratio rose to 0.94% from 0.85% a year earlier.
China Construction Bank (CCB) recorded an 11% gain in net profit to CNY214.7 billion for last year. The net interest margin stood at 2.74%, one basis point lower than 2012 but still pushing up the bank’s net interest income by CNY36 billion. The bank’s net fee and commission income grew 11.52% in 2013. The biggest increase came from bank-card fees, which jumped 28% to CNY25.8 billion. Fees from credit cards surged nearly 50%. Operating expenses stood at CNY188 billion last year, up 10% over 2012. Construction Bank’s non-performing loans (NPLs) amounted to CNY85 billion, an increase of CNY10.7 billion, while its bad-loan ratio was 0.99%, unchanged over the previous year.
Bank of Communications (BoCom) posted a 2% drop in its net profit to CNY13.6 billion in the fourth quarter of 2012. For the full year, net profit rose to CNY62.3 billion from CNY58.4 billion in 2012. The bank’s non-performing loan (NPL) ratio rose to 1.05% at the end of December from 1.01% at the end of September. The net interest margin was 2.52% at the end of the fourth quarter, down from 2.53% at the end of the third. Interest income increased by 8.76% to CNY130.66 billion for the full year, while gains in fees and commissions rose 24.4%.
China Merchants Bank, China’s sixth-largest lender by assets, said net profit grew 14.3% to CNY51.7 billion. The bad-loan ratio deteriorated to 0.83% from 0.61%, with the amount of non-performing loans (NPLs) increasing 56.7% to CNY18.3 billion at the end of last year. Deposits rose 9.5%. The net interest margin declined 0.21 percentage point to 2.82%. Merchants Bank’s tier-one ratio rose to 9.27% last year from 8.34% in 2012, thanks to a timely rights offer that raised CNY27.5 billion in September last year. China Citic Bank, which announced a 26.2% gain in net profit, also saw asset quality slightly decline last year, with the bad-loan ratio up 0.29 percentage point to 1.03% from a year ago.
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