CCB profit beats analysts' view | Shanghai Daily

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October 24, 2009

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CCB profit beats analysts' view

CHINA Construction Bank, in which Bank of America has about an 11-percent stake, yesterday posted forecast-beating results, after third-quarter lending dropped to more normal levels following a boom earlier in the year.

China's big banks extended a surprisingly strong 516.7 billion yuan (US$75.67 billion) in loans last month, up from 410.4 billion yuan in August, but still well below levels in the first six months.

Analysts had worried that China might lean on banks to tighten lending, thereby eating into their profits, as it reined in its ultra-relaxed monetary stance from early in the year as part of its economic stimulus.

CCB, China's No. 2 lender by assets, said its net interest margin narrowed to 2.41 percent at end of September from 3.3 percent a year earlier and 2.46 percent at the end of June.

Its non-performing loan ratio fell to 1.57 percent, against 2.21 percent at the end of last year, the bank said.

Some fear the ultra-loose lending in the first half could work through into an increase in bad loans.

Beijing-based CCB posted a net profit of 30.3 billion yuan (US$4.4 billion) for the third quarter, versus 25.6 billion yuan a year earlier and an average forecast from analysts of 28.36 billion yuan.

Smaller rival China Minsheng Bank kicked off the country's bank earnings season on Wednesday with an 8.9-percent rise in quarterly profit, citing factors including increased net interest income.

ICBC, China's largest bank, and the Bank of China, its largest foreign exchange lender, will report their third-quarter results next Thursday.




 

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