By Kosaku Narioka
Bank of Communications recently released its first-half results, highlighting key information about its financial performance.
Net Profit
The Chinese bank announced a 4.9% increase in net profit, reaching 42.52 billion yuan ($5.84 billion) for the six months ending June 30. However, this figure fell short of the estimated net profit of CNY46.69 billion, according to a poll of analysts by Visible Alpha.
Real Estate
Bank of Communications experienced a rise in non-performing loan ratios for corporate real estate, increasing from 2.80% at the end of December to 3.39% at the end of June. Despite this, corporate real-estate loans accounted for 6.5% of the bank’s total loans and advances, totaling CNY7.796 trillion at the end of June—down from 7.13% at the end of 2022. The bank reassured stakeholders that they have taken measures to strengthen the prevention and control of risks in key areas like the real estate market and local government debts.
Interest Income
As interest rates declined in recent quarters, Bank of Communications reported a 3.1% decrease in net interest income for the first half of the year, amounting to CNY82.39 billion. The net interest spread also dropped from 1.43% to 1.19% compared to the previous year. Net interest spread represents the difference between the average rate of return on interest-bearing assets and the average rate of cost of interest-bearing liabilities.
Fees and Commissions
Net fee and commission income declined by 0.8% to CNY24.58 billion, largely due to decreased fees and commissions in its investment-banking and wealth-management businesses.
