BOC sees dramatic slowdown in net profit


THE Bank of China, the nation's fourth-biggest lender, yesterday said its net profit slowed sharply in the first quarter of this year from a year earlier, a harbinger of a bad quarter for net earnings at other state-run banks.

The lender's first-quarter net profit rose 9.8 percent, a plunge of 17.9 percentage points from last year's 27.8 percent, to 38.45 billion yuan (US$6.08 billion).

"The bank's insipid performance in the first quarter coincides with my estimation that the remaining three largest state-owned banks' growth is about 15 percent," said Mu Hua, an analyst at GF Securities Co.

An industry analyst earlier estimated that the combined profits of Chinese banks will rise 19 percent on an annual basis in the first three months.

Other analysts said the lenders are hit by slower domestic economic growth.

BOC's interest income in the first quarter added 13.19 percent to 60.6 billion yuan, and net interest margin was flat at 2.11 percent. Its non-interest income rose 14.34 percent to 34.33 billion yuan, or 36 percent of its total income.

Non-performing loans fell from the end of last year to 63.93 billion yuan, and the NPL ratio shed 0.03 percentage point to 0.97 percent.




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