Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  SHANGHAI STOCK EXCHANGE  >  Bank of China Ltd    601988   CNE000001N05

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

China Banks See Slower Interest And Fee Income Growth

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/27/2012 | 02:05pm CEST

-- China's five largest banks report combined first-quarter net profit of CNY208.94 billion

-- Interest and fee income growth decelerated in the first quarter

-- Analysts expect the banks to report net profit growth of 14% on average in 2012, down from 26% growth in 2011

(Combines earlier stories, adds a bank executive's comment in the 7th paragraph, adds analysts comments in the 8th, 9th and last paragraphs)

China's five largest banks continued to crank out bumper profit in the first quarter, but the key engines for their earnings growth, interest and fee income, started to run out of steam after supercharged expansion in recent years.

Friday, Industrial & Commercial Bank of China Ltd. (1398.HK), the largest bank by assets on the mainland, said its January-March net profit grew 14% to CNY61.34 billion ($9.77 billion). Net profit in China Construction Bank Corp. (0939.HK), Agricultural Bank of China Ltd. (1288.HK) and Bank of Communications Co. (3328.HK) rose by 9.2%, 28% and 20% to CNY51.51 billion, CNY43.45 billion and CNY15.88 billion respectively.

On Thursday, Bank of China reported a 10% gain in first-quarter net profit to CNY36.76 billion.

The results are strong compared to most of their Western peers that are still struggling with the anemic economic recovery in their respective markets. But their earnings reports offered some signs of uncertainty for China's banking sector as the world's second-largest economy continues to cool.

Highly dependent on making loans to fuel investment, banks' figures suggest they are taking a hit as businessmen grow cautious amid an economic slowdown.

While ICBC's net interest income earned on lending rose 16% to CNY98.82 billion, the rate slowed from a 25% rise in the year-earlier period. Bank of Communications' net interest margin, a key gauge of the profitability of banks' lending business, increased slightly to 2.60% in the first quarter from 2.59% in the fourth quarter of last year.

Given the current economic situation, "it's impossible to see a big increase in the bank's interest margin this year," said Yu Yali, chief finance officer at Bank of Communications.

"Net interest margins are likely to decline slightly across the board. We believe this reflects banks' ability to price loans has peaked or come under pressure amid weakening demand and continuing competition for deposits," Citigroup said in a recent note.

Analysts forecast China's five largest banks will report net profit growth of 14% on average in 2012, down from 26% growth in 2011.

Adding to the lackluster outlook is a sharp slowdown in banks' fee income growth. In recent years, Chinese banks have been gearing up to diversify their revenue streams into fee-based business segments, such as credit card and advisory services.

But higher consumer fees have fueled discontent against Chinese banks that have already come under criticism for enjoying a state-mandated fat interest margin and a lack of lending to small businesses.

In February, China's central bank, the state planning agency and the banking regulator barred bank subsidiaries from setting their own charges, stipulating that all service fees must be decided at the head office.

The move seems to have had some impact. ICBC's net fee and commission income grew merely 10% to CNY28.62 billion in the first quarter, down from the 42% increase in the year-earlier period. Such income posted by Bank of Communications Co. rose 22%, compared to 43% growth in the same period of last year.

"We're going to see a slowdown in the growth of Chinese banks' intermediary business segments this year due to a combination of relatively higher base numbers last year and stricter regulatory enforcement," said GF Securities analyst Mu Hua.

-Rose Yu and Yue Li contributed to this article, Dow Jones Newswires; 8621 6120-1200; [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on BANK OF CHINA LTD
12:28p SOFT LOANS, TRADE HARDBALL : ZTE Seeks $11B in Credit Finance
06/27 BANK OF CHINA : Midea Seeks Refinancing for Bridge Loan of Kuka Takeover
06/23 Belle Privatization Won USD28bn Loans
06/23 BANK OF CHINA : BOCHK wins the Best SME's Partner Gold Award
06/21 ZTE Agreed to Apply for Credit Line
06/19DJBOC Aviation to Buy 10 Boeing 737 MAX 10 Jets
06/12 CHINA STATE CONST ENG : CSCEC CFO Works Shortly in Four Southeast Asian Countrie..
06/09 BANK OF CHINA : Gansu firm to offer 2nd round of bonds
06/07 BANK OF CHINA : Presence of Chinese Bank in Angola Aimed for Internationalize Ba..
06/07 BANK OF CHINA : Loan Portfolio Is U.S.$381 Million
More news
Sector news : Banks - NEC
04:57p TSX rises with financials, resource stocks weigh
04:54pDJTBC BANK : Societe Generale Sells Entire Stake
01:19p Cyber attack hits property arm of French bank BNP Paribas
12:11p EXCLUSIVE - HALLIBURTON IN TALKS TO : sources
09:56a Toshiba says chip unit pact delayed as talks with preferred bidder ongoing
More sector news : Banks - NEC
News from SeekingAlpha
05/10 Sifting The Price Difference Between A Shares And H Shares (AH Premium) For V..
04/28 Bank Of China Appears Undervalued--But There Is A Catch
04/27 THE GLOBAL SYSTEMICALLY IMPORTANT BA : An Update
03/02 BANK OF CHINA : A Good Value Play
02/20 Why The Border Tax Will Not Pass And How To Position For It
Advertisement
Financials ( CNY)
Sales 2017 488 769 M
EBIT 2017 275 173 M
Net income 2017 167 690 M
Debt 2017 99 714 M
Yield 2017 4,69%
P/E ratio 2017 6,42
P/E ratio 2018 6,20
EV / Sales 2017 2,95x
EV / Sales 2018 2,71x
Capitalization 1 341 776 M
More Financials
Chart BANK OF CHINA LTD
Duration : Period :
Bank of China Ltd Technical Analysis Chart | 601988 | CNE000001N05 | 4-Traders
Full-screen chart
Technical analysis trends BANK OF CHINA LTD
Short TermMid-TermLong Term
TrendsBearishBullishBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 18
Average target price 4,27  CNY
Spread / Average Target 17%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Si Qing Chen Vice Chairman & President
Jun Li Chairman-Supervisory Board
Guo Li Tian Chairman
Qingsong Zhang GM-Accounting & Information & EVP
Wan Ming Liu Member-Supervisory Board
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
BANK OF CHINA LTD6.40%197 308
JP MORGAN CHASE & COMP..2.04%312 824
WELLS FARGO-3.54%265 657
INDUSTRIAL AND COMMRCL..15.87%260 221
BANK OF AMERICA5.29%231 581
CHINA CONSTRUCTION BAN..15.99%214 247
More Results