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26th August 2011

Bank of China result

Bank of China reported first half net attributable profit of Y66.5bn (€7.2bn £6.3bn $10.4bn ¥797bn) UP 28%.


Net Interest Income was up 20% powered by a lending increase and Net Interest Margin up 7bp at 2.11%. Non Interest Income rose 36%. Operating expenses rose 19%. Impairment losses were up 23.5% on higher lending with NPL at 1% down 10bp. Cost to income was 28.8%, better by 98bp whilst ROE was 19.9%.


The result was a little better than market consensus however its shares are still performing poorly due to its high concentration of foreign currency denominated assets. Such assets are 20% of the bank's total assets, higher than the other big 4 banks. Bank of China has significant assets in the South European nations and Ireland whilst Industrial and Commercial Bank of China the other bank with major overseas assets, has much of its overseas assets in developing countries.