CHINA Merchants Bank Co, the nation's fifth-largest by market value, said first-quarter profit jumped 157 percent on improved margins and higher fee income.
Net income rose to 6.32 billion yuan (US$904 million), or 0.43 yuan a share, from 2.46 billion yuan, or 0.17 yuan a share a year earlier, the Shenzhen-based bank said in a statement to the Hong Kong stock exchange yesterday. It cited unaudited figures calculated using domestic accounting standards.
Net fee and commission income, such as from mutual fund sales and credit card transactions, more than doubled to 1.93 billion yuan. Merchants Bank benefited from higher demand for financial services as China's economy expanded 10.6 percent during the quarter, even as the government tried to slow growth, Bloomberg News said.
"Things will get tougher in the second half" as the central bank may further tighten lending, said Dominic Chan, a Hong Kong- based analyst at CLSA Asia-Pacific Markets, before the earnings announcement. "The risk is on the downside for fee and brokerage income for the full year."
Last year, the central bank raised interest rates to a nine- year high. The amount of money that banks must set aside as reserves will rise by 50 basis points tomorrow for the third time this year.