Bank of China (Hong Kong) (2388) reported a 7.5 percent year-on-year increase in its operating profit before impairment charges, reaching HK$44.57 billion for the first nine months, primarily driven by a recovery in the investment market.
The bank's net operating income for the period rose 6 percent to HK$57.18 billion.
However, its net interest margin narrowed by 8 basis points year-on-year to 1.54 percent, attributed to lower market interest rates which reduced asset yields. Conversely, net fee and commission income saw a significant 22 percent jump to HK$9.05 billion, fueled by the improved sentiment in the investment market.
Net impairment charges for the first nine months increased by HK$1.8 billion to HK$5.12 billion, mainly due to internal rating downgrades for some customers and a deterioration in certain existing non-performing accounts.
Looking specifically at the third quarter, pre-impairment operating income fell nearly 14 percent quarter-on-quarter, with operating profit dropping 18 percent to HK$12.86 billion.
A slight positive was the net interest margin, which expanded by 1 basis point to 1.54 percent due to rising Hong Kong dollar interest rates and improved deposit pricing.
However, net fee and commission income declined about 4 percent quarterly, primarily because of lower loan commission revenue.
Net impairment charges for the past quarter were over HK$1.8 billion, a quarter-on-quarter decrease of HK$250 million, largely driven by improvements in macroeconomic model parameters.
