Bank of East Asia posts 53.2% profit jump to HK$1.5b

Lower impairment losses in Mainland China caused the surge.

The Bank of East Asia (BEA) recorded a 53.2% profit surge to HK$1.5b in H1, mainly driven by a notable decrease in impairment losses in Mainland China, according to an announcement.

Pre-provision operating profit, on the other hand, plunged 21.9% to HK$4.1b.

Net interest income dropped 17.6% to HK$6.1b, net interest margin slipped 1.59%, and average interest earning assets fell 1.7%. Meanwhile, annualised return on average assets and annualised return on average equity stood at 0.3% and 2.5%, respectively, compared to 0.1% and 1.4% in H1 2019.

Total operating expenses fell 11.6% to HK$4.4b led by cuts in staff costs and expenses incurred for credit card and online retail lending businesses in China.

Net fee and commission income rose 6% to HK$1.4b. Taken together, net trading and hedging results and net results from other financial instruments fell to HK$420m.

The group’s net insurance profit went down HK$306m driven by adverse mark-to-market valuations on financial instruments. Overall, non-interest income fell 15.1% to HK$2.4b, with total operating income slipping 16.9% to HK$8.5b.

Basic earnings per share were HK$0.39 in H1, compared to HK$0.22 a year earlier.