It has embarked on 28 technology projects so far.
Bank of China’s (BOC) latest financial performance was lacklustre at best after a weak performance in fees which fell 4.4%, softening the 5.3% earnings growth in Q2.
In a breakdown, credit card commitment fees and spread income from forex fell by 15.4% and 11.3% respectively in Q2, according to UOB Kay Hian.
However, the bank’s prospects for the year ahead remains positive after it embarked on 28 technology projects and will set up platforms related to cloud, big data and AI technologies.
“BOC is well-positioned for growth as many mobile banking platforms will be launched very soon,” Jonathan Koh, UOB analyst said in a statement.
In fact, the bank may already be feeling some of the gains from its digital pivot after achieving 64% increase in active users for its mobile banking unit in the first half of 2018. Transaction volume also surged 73% YoY to RMB8.3t over the same period as the bank works to enhance the functions, convenience and user-friendliness of its mobile banking.
Here’s more from UOB Kay Hian:
Stronger loan growth from overseas. Loans expanded 2.4% qoq and 4.6% ytd in 2Q18. Renminbi loans grew 1.9% qoq while other loans grew 4.1% qoq. Loans for Hong Kong, Macau & Taiwan increased 8.4% hoh in 1H18. Trade bills accounted for 13.5% of corporate loans.
We expect loans to grow slower at 7.8% yoy for 2018, from 9.3% in 2017. BOC extended loans to infrastructure projects, high-end manufacturing and environmental protection. It supports regional developments, such as Xiong’an New Area, Guangdong-Hong Kong-Macau Greater Bay Area and Hainan Free Trade Zone (port). BOC will promote inclusive finance through loans for SMEs. It has disbursed US$16.5b of credit to support Belt & Road initiatives in 1H18, bringing cumulative credit granted to US$115.9b for 600 projects.
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