NewBank of China annual pretax profit rises 0.04 per cent, as bad debt related-losses jumped 23 per cent

Bank of China, now the world’s fourth largest bank, up from its seventh place in 2014, reported Wednesday 2015 pretax profit rose 0.04 per cent to 231.5 billion yuan (HK$277 billion). The figure fell short of average analysts’ expectation of 234.9 billion yuan.

BOC was dragged down by bad debt-related losses which leapt 22.5 per cent to 59 billion yuan. The bank’s overall non-performing loan ratio increased by 25 basis points to 1.43 per cent, even as the bank had expanded the size of its balance sheet by 10 per cent to 16.8 trillion yuan. The industry average NPL ratio is currently 1.67 per cent.

“Under the complex operating environment, it hasn’t been easy to achieve growth last year [2015],” BOC President Chen Siqing said.

“2016 will be a year of deep restructuring. The downward adjustment for the economy leading onto asset side pressure is serious. Our strategy for this year is to stabilise and to improve.”

He said BOC must generate 500 million yuan a day in revenue this year.

The banks executive vice president Ren Deqi said strength in the US dollar had been a positive factor lifting BOC’s balance sheet amidst the yuan’s depreciation and capital outflows from the domestic economy.