CCB net rises 5pc to 266b yuan

Business | Kevin Xu and Bloomberg 30 Mar 2020

China Construction Bank (0939) said net profit rose nearly 5 percent year-on-year to 266.7 billion yuan (HK$291.4 billion) in 2019, better than the average estimate of 263.8 billion yuan in a Bloomberg survey.

Basic earnings per share were 1.05 yuan. It declared a final cash dividend of 0.32 yuan per share.

Net interest income rose 5 percent year-on-year to 510.68 billion yuan last year. Net interest margin dropped 5 basis points to 2.26 percent from a year before. Return on average equity decreased 86 basis points year-on-year to 13.18 percent.

Credit impairment losses expanded 7.8 percent year-on-year to 163 billion yuan last year. Non-performing loans rose 5.7 percent year-on-year to 212 billion yuan, but NPL ratio dropped 4 basis points to 1.42 percent.

Common Equity Tier 1 ratio rose 5 basis points to 13.88 percent.

"The banking industry in China is still facing a complex operating environment," the Beijing-based lender said in an exchange filing yesterday.

"Covid-19 will affect China's short-term economic growth, leading to a decline in consumption and presenting challenges to business operations. The deepening interest rate liberalization will intensify competition within the financial industry and across other industries, putting the interest yield of commercial banks under pressure."

Shares of CCB closed at HK$6.29 last Friday, down by about 7 percent from the beginning of the year but outperforming the 17 percent decline in the benchmark Hang Seng Index.

China Construction Bank joined state-run peers in weathering a trade war and a steep economic slowdown to post record profits in 2019.

Bank of China (3988) reported last Friday that its net profit increased by 4.06 percent on-year to 187.4 billion yuan.

The ratio of nonperforming loans fell by 0.05 percentage points to 1.37 percent, from the prior year-end.

Meanwhile, Industrial and Commercial Bank of China (1398) said last Friday its net profit climbed 4.8 percent to 312.2 billion yuan in 2019 from a year before. Non-performing loans ratio declined 9 basis points year-on-year to 1.43 percent last year. Stronger balance sheets helped beef up their capabilities to cope with the spreading virus that has thrown China into the worst economic shock in four decades and threatens to cause lenders' nonperforming loan ratio to triple, according to S&P Global's estimate.

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