BEA makes $1.5b in first half

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

Pre-provision operating profit in the first six months dropped by 21.9 percent to HK$4.12 billion from a year before.

Basic earnings per share were HK$0.39, and the bank declared an interim dividend of 16 HK cents per share.

The family-run bank's net interest income fell by 17.6 percent year-on-year to HK$6.11 billion in the first half. The 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.

In terms of asset quality, impaired loan ratio rose to 1.29 percent at the end of June, compared with 1.22 percent at the end of December last year.

The 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, according to co-chief executives Brian Li Man-bun and Adrian Li Man-kiu.

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, they said.