Bank of East Asia net plunges by 74.9pc to HK$1b on China impairmentsBusiness | 21 Aug 2019 12:31 pm
Bank East Asia said today profit for the first half fell by 74.9 percent to HK$1 billion, representing a drop of HK$2.99 billion compared with the HK$3.99 billion earned in the same period in 2018.
Pre-provision operating profit was strong, growing by 19.5 percent year-on-year, BEA said.
The drop in profit was mainly due to a significant increase in impairment losses in mainland China.
The basic earnings per share were HK$0.22, compared to HK$1.30 for the corresponding period in 2018.
Annualized return on average assets and annualised return on average equity stood at 0.1 percent and 1.4 percent, respectively, compared with 0.9 percent and 8 percent, respectively.
Net interest income increased by HK$1.15 billion, or 18.5 percen, to HK$7.40 billion, with net interest margin rising from 1.70 percent to 1.90 percent and average interest-bearing assets growing by 6.4 percent.
Net fee and commission income grew by HK$9 million, or 0.7 percent, to HK$1.37 billion.
Commission income from credit cards, loans, overdrafts and guarantees, trade finance and the sale of third-party insurance policies grew, while commission income from securities and brokerage, investment products, other retail banking and financial consultancy decreased.
Taken together, net trading and hedging results and net results from financial instruments designated/ mandatory at fair value through profit or loss increased by HK$132 million to HK$562 million.
Overall, non-interest income grew by 18.4 percent to HK$2.69 billion. Operating income increased by 18.5 percent to HK$10.10 billion.
Four legacy loan assets in mainland China with a nominal value of HK$6.2 billion have been downgraded, after commercial property market conditions weakened in non-tier-1 cities during the first half, the bank reported. Certain legacy loan assets were disposed of to third parties.