BOC’s 11% rise in Q4 profit beats view
Print Edition
THE Bank of China yesterday posted an 11 percent increase in fourth-quarter net profit, beating estimates, as China’s fourth-largest lender shrugged off concerns about rising bad loans and cut provisions.
Net profit rose to 36.7 billion yuan (US$5.9 billion) in the fourth quarter from 33.1 billion yuan in the same 2012 period, according to Reuters calculations based on full-year profit figures.
The profit is slightly above the average estimate of 34.2 billion yuan made by six analysts polled by Thomson Reuters.
For 2013, BOC’s net profit rose 12.5 percent to 156.9 billion yuan from 139.4 billion yuan 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 percent year on year in the fourth quarter.
The decline contrasts with the Agricultural Bank of China, which on Tuesday posted its slowest profit growth in 2013 since it became listed due to higher bad loan provisions.
A slowdown in China’s economic growth and the debt overhang from the massive credit-fueled stimulus that policymakers launched in response to the 2008 financial crisis are stoking concern about a rise in loan defaults.
BOC’s non-performing loan ratio was flat at 0.96 percent at end-December compared with end-September. The share of special mention loans, which measure loans not yet classified as non-performing but under pressure, fell by half a percentage point.
Net interest income added 10.4 percent in 2013, while gains in net fees and commissions rose 17.4 percent.
Its net interest margin was 2.24 percent at the end of the fourth quarter, compared with 2.22 percent a quarter earlier.
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