Bank of East Asia profits rise 6pc, thanks to increase in mainland lending
Bank increases net income 6pc as it steps up lending across borderdespite credit risks
Bank of East Asia's net profit rose 6 per cent to HK$3.58 billion in the first six months of the year as it expanded offshore lending to mainland clients.
The bank said yesterday asset quality on the mainland would stay under pressure during the second half and it would take "proactive measures to mitigate credit risk".
First-half growth for cross-border business climbed 6.7 per cent and the bank was likely to increase exposure in the second half, according to newly appointed executive director Adrian Li.
"We have changed our focus to do more offshore financing for the mainland corporates in Hong Kong," said Li, the son of chief executive David Li Kwok-po. "We are very comfortable with this cross-border trade."
The shift to increasing exposure to mainland corporations' offshore investment could lower the risk of direct exposure to the mainland economy, where growth has been uncertain.
"That's quite reasonable because these overseas investments should be in places like Singapore or London, less risky environments," said Edmond Law, an analyst at UOB Kay Hian.