Bank of Communications' net profit up 1% to US$9b

But the bank remains cautious for 2017 margin outlook.

2016 net profit rose 1% to Rmb67b (US$9b), 1% and 3% above Jefferies and consensus estimates.

Here's more from Jefferies:

B/S: deposit structure improved but growth still weak. In 2016, loan and asset grew 10% and 17% respectively. However, deposits only grew 5%, meaning interbank funding was the major funding source for balance sheet expansion. Deposit structure did improve, evidenced by rising demand deposit contribution from 45% to 52%.

Asset quality: NPL stabilising and management appear confident. NPL ratio rose 1bp to 1.52% while >90 day overdue and special mention loan ratio both declined. Management appeared confident for 2017 loan quality.

NIM: stabilising recently but cautious for 2017 outlook. BCOM comments that 2H16 NIM stabilised at around 2.0% level excluding the tax code change impact. However the bank remains cautious for 2017 margin outlook, citing rising funding cost and their conservative risk appetite may further squeeze margin a bit.

Capital and reform: both positive. CT1 CAR stood at a comfortable 11.0% level. Management achieved good progress in further business reform, yet there is no timetable for allowing private strategic investors or an employee shareholding scheme.