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China’s third largest bank stumbles
The weaker Chinese economy has claimed Bank of China, Ltd as a victim.
The Beijing-based bank, China’s third-largest by assets, said profit growth fell to 10% in the first quarter as China’s economic malaise curbed loan expansion and margins. Profit growth dropped from 10.8% in the previous quarter and 28% year-on-year.
Net income, however, rose to US$5.8 billion from US$5.3 billion a year earlier. The bank advanced US$39 billion of new loans in the first quarter, 17% less than a year earlier.
Net interest income rose 13.2% to US$9.6 billion during the quarter while the loan margin stayed unchanged at 2.1%. Net fee and commission income from businesses such as trade finance and custodial services increased 13.8% to US$3.4 billion.
Non-performing loans (those overdue for at least three months) rose by US$106 million to US$10.2 billion at the end of March, and comprised 0.97% of total loans.
China’s economy expanded at the slowest pace in almost three years during this first quarter, increasing pressure on the government to ease monetary policy. The People’s Bank of China, the central bank, in February cut lenders’ reserve requirements for the second time in three months to spur credit expansion and bolster economic growth without triggering increases in consumer and property prices.
