Chinese banks release first-quarter results
April 30, 2013 Category Finance, Weekly
The Bank of China (BOC) and the Bank of Communications (BoCom) reported slower growth in net profit in the first quarter of this year as the Chinese economic expansion slowed. BOC reported a 8.2% rise in net income in the first three months to CNY39.8 billion, compared with 9.9% a year earlier. Non-performing loans (NPL) stood at CNY66.4 billion at the end of March, up from CNY65.5 billion at the end of last year. The NPL ratio dropped 0.04 percentage points to 0.91%, as local-currency loans grew 4.02% over the quarter. The net interest margin, a key measure of lending profitability, increased by 0.07 percentage point to 2.22% over the quarter, helping the bank’s net interest income to grow 10.5% year-on-year to CNY66.96 billion in the first quarter. Bank of China (Hong Kong)’s first-quarter operating profit before impairment allowances grew 3.4% from a year earlier to HKD6.9 billion. Operating expenses fell 12.3% from the previous quarter, owing to lower staff costs and business related-expenses, the bank said.
Industrial and Commercial Bank of China (ICBC) said its net earnings rose 12.08% year-on-year to CNY68.74 billion on robust growth in net fee and commission income, dropping from the 14.5% rate for all of last year. ICBC’s net interest income grew 8% from a year ago, and its net fee and commission income jumped 19%. Loans and advances grew 5.24%. By the end of last month, the bank’s non-performing loans (NPL) increased 7.6% over the quarter to CNY80.2 billion, and the NPL ratio rose 0.02 percentage point to 0.87%. Provisions for loan impairment losses increased 4.9% over the quarter. China Construction Bank’s net interest income rose 12.44%, and its net fee and commission income jumped 18.9%. Loans and advances grew 4.63%. By the end of March, its non-performing loans had increased 4.2% over the quarter to CNY77.8 billion, but its NPL ratio remained at 0.99%. CCB posted a 15.66% increase in net profit to CNY59.58 billion. Agricultural Bank of China (ABC) said its net earnings rose 8.19% to CNY47.01 billion. Profit growth at slowed significantly from 19% for the whole of last year, as net interest income grew only 4%. Impairment losses on assets increased 17% year-on-year to CNY12.44 billion.
The net profit at BoCom, China’s fifth-biggest bank, grew 11.5% to CNY17.7 billion in the first quarter, compared with 19.6% in the same period of last year. BoCom said its outstanding loans to local government financing vehicles (LGFVs) accounted for 7.97% of all lending at the end of March, 0.52 percentage point lower than the end of last year. Meanwhile, its outstanding loans to the property sector dipped 0.2 percentage point to 5.9% of the total. Minsheng Securities said in its latest outlook that BOC and BoCom will see net profit growth of 3.8% and 7.9% respectively for the whole year. The average profit growth at the 11 listed lenders in China may reach 9% in the first quarter from the same period a year earlier, the brokerage said.
China Minsheng Banking, the nation’s largest privately-owned lender, said net profit surged 20% in the first quarter as strong fee and commission earnings more than offset shrunken profits from making loans. Net earnings totaled CNY11.02 billion in the January-March period, compared with CNY9.17 billion in the same period last year, the bank said in a stock exchange filing. The profit growth, generally in line with market expectations, was made as the bank stayed focused on “non-state-owned companies, small and micro-enterprises, and high-end retail customers”, it said. The first-quarter profit growth marked a significant slowdown from the 34.5% net earnings increase for the whole of last year, as profits were eroded by two interest rate cuts last year and fiercer competition caused by the moves towards interest rate deregulation. The bank’s net interest margin narrowed 0.15 percentage point over the first quarter to 2.45%, the bank said. Net non-interest income surged 44% from a year ago to CNY8.76 billion in the first three months, with its contribution to operating income rising 6.12 percentage points to 30.35%. The NPL ratio remained unchanged at 0.76%.
Industrial Bank Co earned CNY11 billion in the first quarter, a year-on-year rise of 32.4%. Net profit at China Citic Bank rose 7.65% to CNY9.21 billion in the first quarter.
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