Pace of profit growth at Bocom more than halves in first half
Gain of 5.6pc for first half reflects slowing loan growth, but bank talks up reform move
Growth in net profit at Bank of Communications, China's fifth-largest bank, more than halved in the first half of the year from the same period last year as the bank mulls major shareholding reforms.
The bank brought in 36.7 billion yuan (HK$46.2 billion) in net profit, an increase of 5.6 per cent on the same period the year before, in line with analysts' expectations, but at less than half the pace of growth last year. In the first half of 2013, profits rose by about 12 per cent.
HSBC has a 19 per cent stake in the bank that chairman Douglas Flint intends to keep as a strategic investment despite growing impairments at the Shanghai-based lender, he said earlier this month.
Profits at China's five biggest state banks are projected to slow this year as economic growth on the mainland enters a period of uncertainty. Analyst estimates for the banks in the first half of the year put average net profit growth at between 7 and 9 per cent.
Bocom officials said loan growth had slowed and narrower net interest margin hit its bottom line, but that the trend was sector-wide. "The banking sector has entered a single-digit growth era and this means the whole industry is back to normal," bank president Peng Chun said at the results briefing in Shanghai yesterday. Loan impairments climbed 20 per cent year on year while net interest margin, a gauge of loan profitability, slid to 2.39 per cent from 2.56 per cent the year before.
Bank of China on Monday reported its net profit rose 11 per cent to 89.72 billion yuan from the same period last year.