BoCom’s net income gains 12%
Print Edition
The Bank of Communications, China’s fifth-biggest lender, reported a year-on-year rise of 12 percent in net profit in the first half of this year, its weakest first-half earnings performance in four years, on weaker loan growth and loan profitability.
Shanghai-based BoCom’s net profit totaled 34.8 billion yuan (US$5.6 billion) in the first six months, up from 31.1 billion yuan a year earlier. However, the growth rate eased from 17.8 percent in the first half of 2012 to 12 percent in the same period of this year, according to a stock exchange filing yesterday.
Net interest income rose 11 percent to 65 billion yuan during the first six months, slower than the 18 percent pace a year earlier.
Its outstanding non-performing loans increased from 27 billion yuan at the end of last year to 31.7 billion yuan at the end of June. Bad loan ratio rose by 7 basis points to 0.99 percent, higher than the average of 0.96 percent of all commercial banks, according to the China Banking Regulatory Commission.
Net interest margin, a measure of loan profitability, weakened 5 basis points to 2.56 percent during the first half compared with the same period in the prior year.
The People’s Bank of China last month removed the lending rate floor to further liberalize interest rates. But the cap on deposit rates stays.
Minsheng Securities estimated the growth in BoCom’s net profit will further slow in the second half. BoCom predicts 67.8 billion yuan net profit for the whole of 2013.
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