China's BoCom H1 profit rises 4.9% on fee growth, Q2 beats view

Credit: REUTERS/Bobby Yip

Bank of Communications Co Ltd, China's fifth-largest state-owned listed bank by assets, reported on Tuesday a 4.9% rise in first-half net profit, thanks to revenue growth contributed by wealth management products.

Adds details of results

SHANGHAI/BEIJING, Aug 27 (Reuters) - Bank of Communications Co Ltd 601328.SS, 3328.HK, China's fifth-largest state-owned listed bank by assets, reported on Tuesday a 4.9% rise in first-half net profit, thanks to revenue growth contributed by wealth management products.

Profit came in at 42.75 billion yuan ($6.03 billion) for January-June, compared to 40.77 billion yuan in the same period a year earlier, the bank said in a statement to the Hong Kong stock exchange.

That implied a second-quarter net profit of 21.68 billion yuan, 4.83% higher than the year-earlier period, Reuters calculations showed.

Two analysts contacted by Reuters had on average forecast a 4.75% rise in quarterly profit.

The results underline the strength of the country's largest banks which are seeing business rebound even as smaller lenders struggle with growing soured debt and shrinking margins, as a bruising trade war with the United States hurts the economy.

BoCom said it had "explored the advantages of wealth management and accelerated the transformation of revenue growth" in the first half, which contributed to its net fee and commission income surging by 9.2% year on year to 23.12 billion yuan.

BoCom's net interest margin, the difference between interest paid and earned and a key gauge of profitability for lenders, slightly deteriorated to 1.58% at the end of June, versus 1.59% at the end of March.

Its non-performing loan ratio stood at 1.47% at the end of June, the same level of three months prior.

The country's top four lenders - Industrial and Commercial Bank of China Ltd 601398.SS, 1398.HK, China Construction Bank Corp 601939.SS, 0939.HK, Agricultural Bank of China Ltd 601288.SS, 1288.HK and Bank of China Ltd 601988.SS, 3988.HK - will report first-half earnings later this week.

By the end of the June quarter, the non-performing loan ratio for the banking sector reached 1.81%, the highest since 2009, data from the China Insurance and Banking Regulatory Commission showed.

($1 = 7.0928 Chinese yuan renminbi)

(Reporting by Engen Tham in Shanghai and Cheng Leng in Beijing; Editing by Christopher Cushing and Muralikumar Anantharaman)

((engen.tham@thomsonreuters.com; +86-21-6104-1769; Reuters Messaging: engen.tham.thomsonreuters.com@reuters.net))

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