Led by a sharp dip in bad and doubtful debts, the International Bank of Asia (IBA) has reported a staggering 925 per cent increase in net profit to HK$244.39 million for the year to December 31, 2000.
The bank's earnings per share rose from 2.03 HK cents to 20.85 HK cents, due mainly to an increase in interest income, strong growth in non-interest income and lower provisions against bad and doubtful loans.
The results, released yesterday, were slightly above analysts' consensus forecast of a HK$200 million net profit and earnings per share of 20 HK cents.
The bank benefited from a 58 per cent decline in specific provisions for bad and doubtful loans. This comes in stark contrast to the situation last year, when higher than expected provisions saw the bank post a net profit of HK$23.83 million.
Mainland-related non-performing loans decreased by 28.9 per cent as resolution of overdue mainland loans commenced. Final payments were received from a number of mainland borrowers. China loans now make up less than 6 per cent of IBA's loan portfolio.
In total, IBA's loan portfolio grew by 29 per cent, with advances to customers climbing to HK$17.4 billion. Vice-chairman, managing director and chief executive officer of IBA, Mike Murad, believed the results were testament to IBA's growth strategy.