China Life Insurance, the biggest life insurer on the mainland, yesterday warned its first-half net profit would be hit by a decline in investment yield and impairment losses.
The company said net profit for the first six months of this year would drop notably, but the percentage fall would not exceed that for the first quarter, when net profit tumbled 29.4 per cent from last year.
This means its net profit for the first half would be at least 9.15 billion yuan (HK$11.1 billion) - higher than market expectations.
According to Bloomberg, the median of profit forecasts by analysts for China Life is 8.45 billion yuan.
The insurer said in the announcement that a decline in investment yield and an increase in impairment losses resulting from the continued depression in the capital market were to blame for the profit fall.
In the first half of 2011, net profit at the insurer dropped 28.1 per cent to 12.96 billion yuan from a year earlier, while earnings per share fell 28.1 per cent to 46 fen.