Bank of Communications (BoCom) posted a near 31 percent jump in
profit in the first quarter on a surge in lending.
BoCom, 18.6 percent owned by HSBC, Europe's biggest bank,
recorded a net profit of 3.8 billion yuan in the first three months
of the year, while total assets reached roughly 1.82 trillion yuan,
up 5.73 percent from the beginning of 2007.
The results are slightly off the pace of annual forecasts - the
bank is expected to earn 16.1 billion yuan for the full year, up 31
percent from 12.3 billion yuan in 2006, according to Reuters
estimates.
Its first-quarter net fee and commission income nearly doubled
to 1.2 billion yuan from 621 million yuan. The trading gains were
161 million yuan, up from 89 million yuan a year earlier.
The Shanghai-headquartered bank said yesterday it had a core
capital adequacy ratio of 8.07 percent by the end of March. The
figure rose to higher than 10 percent after the bank raised $3.3
billion in a Shanghai listing earlier this year. Its shares have
jumped 71 percent since their May 15 trading debut.
"Thanks to the IPO in the mainland market, the bank's capital
strength is boosted, and we have plans to expand our overseas
institutions and network," Peng Chun, executive director and
vice-president of BoCom, said yesterday during a press conference
after the release of the quarterly report.
He said the bank, also listed in Hong Kong, has received
regulatory approval to open branches in Frankfurt, Germany, and
Macao, which will begin operating in the second half of 2007.
"If there are opportunities, our bank would like to make an
attempt in overseas acquisitions," Peng said.
The bank is also ready to launch products linked to overseas
stock markets under the revised qualified domestic institutional
investors program, pending regulatory approval.
But due to the continuous diversion of capital from bank
accounts to the red-hot domestic stock market, BoCom has witnessed
its personal savings deposits in the first quarter decrease by 8.5
billion yuan year-on-year.
Peng said the bank has issued notices to its outlets and
modified its system to curb credit capital flowing into the stock
market.
"We banned lending to individuals who could not specify how to
use the money, and the examination and monitoring were strengthened
after personal credit loaning," he said.
The bank's A shares dropped 5.68 percent yesterday to 12.78 yuan
after the government's latest effort to curb the nation's booming
stock markets. Its Hong Kong shares closed at HK$8.10, down 1.58
percent.
(China Daily May 31, 2007)