Money
BOC enjoys leap in first-quarter profit
By LUO JUN (China Daily)
Updated: 2010-04-28 09:43
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SHANGHAI - Bank of China Ltd, the nation's third-largest lender by market value, said first-quarter profit rose 41 percent, aided by rising demand for loans and fee-based services.
Net income climbed to 26.23 billion yuan ($3.8 billion), or 0.10 yuan a share, from 18.57 billion yuan, or 0.07 yuan a year earlier, Beijing-based Bank of China said in a statement on Tuesday.
Profit beat the 25 billion yuan average estimate of six analysts surveyed by Bloomberg.
Bank of China and larger rivals Industrial & Commercial Bank of China Ltd and China Construction Bank Corp benefited from an economy that grew 11.9 percent last quarter, driving demand for everything from mortgages to trade finance. Still, government moves to crack down on asset bubbles fueled by record credit may cause an increase in bad debts, said Tang Yayun, an analyst at Northeast Securities Co.
"Without any policy shock, Chinese banks can report very stable profit growth until 2012," Tang said before the earnings announcement.
"But the tide was shifting fast over the past two weeks with all those tightening measures hitting hard on the property market and eventually the banks and probably the economy."
China's government raised down-payment requirements and mortgage rates on second home purchases on April 15, after the nation's economy expanded at the fastest pace in three years in the first quarter and property prices jumped a record 11.7 percent in March. Banks were told to stop lending to people who are purchasing their third home or more.
Bank earnings
Shares of Bank of China have dropped 3.8 percent in Hong Kong this year, compared with a 2.8 percent slide in the city's benchmark Hang Seng Index. The stock fell 1 percent to HK$4.04 on Tuesday before the release.
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US rivals Bank of America Corp, JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co, beneficiaries of $140 billion in taxpayer funds, posted combined first-quarter profits of $13.4 billion, the most since the second quarter of 2007 before the credit crisis began, as their investment-banking arms capitalized on fixed-income trading.
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