Bank of East Asia books HK$1.5b income

Bank of East Asia (0023) said first-half net profit grew by 53.2 percent to HK$1.53 billion, due to a significant drop in impairment losses in mainland China.

Pre-provision operating profit dropped by 21.9 percent to HK$4.12 billion.

The basic earnings per share were HK$0.39.

The bank declared an interim dividend of 16 HK cents per share.

Net interest income fell by 17.6 percent to HK$6.11 billion. Net interest margin dropped by 31 basis points to 1.59 percent. Non-interest income fell by 15.1 percent to HK$2.36 billion.

Co-chief executive Brian David Li Man-bun believes BEA’s mainland China business will turn a profit in the near future.

Net loss of BEA’s mainland China banking operations in the first half narrowed by HK$2.37 billion year-on-year to HK$468 million.

Pre-provision operating profit for BEA China was HK$1.09 billion in the first six months. Of the HK$1.7 billion impairment losses in the mainland China business, about HK$500 million reflects forward-looking information.

About 14 percent of the loan portfolio in BEA’s Hong Kong business are classified into the category of high-risk industry, such as retail, hotel, aviation, and trading and manufacturing industries, and about 30 percent of impairment losses reflect forward-looking information, said co-chief executive Adrian David Li Man-kiu.