Agricultural Bank Q3 results beat forecasts
Profit grows 16pc as easing measures boost credit demand, helping lender follow Bank of China in beating forecasts
Agricultural Bank of China posted a forecast-beating net profit growth of 16 per cent in the third quarter from a year ago, and analysts think increased demand for loans on the mainland will buoy earnings this quarter.
The Hong Kong-listed bank, the mainland's third-largest lender by market value, posted earnings of 39.58 billion yuan (HK$48.8 billion) in the three months to September, up from 34.1 billion yuan a year earlier. The figure beat the 37.8 billion yuan average estimate by 10 analysts surveyed by Bloomberg.
Bank of China, the country's fourth-largest lender by market value, also posted a better-than-estimated third-quarter profit on Thursday.
The growth of Agricultural Bank's net profit was driven by net interest income, which rose 8.8 per cent to 85.55 billion yuan from a year earlier. Net interest margin, the spread between what banks earn from lending and their funding costs, stood at 2.82 per cent, an increase of 0.02 percentage point from a year ago.
Total loans grew nearly 11 per cent to 5.98 trillion yuan in the third quarter from the end of last year. The bank said fee income went up 8.4 per cent to 19.18 billion yuan in the third quarter from the year-earlier quarter.
The People's Bank of China's easing measures, including cuts in interest rates and injecting more liquidity in the system through so-called reverse repo operations, have boosted credit demand, said Kenny Tang Sing-hing, general manager at AMTD Financial Planning.