| Bank of Communications soars as loans and fees take effect |
SHANGHAI, Aug. 17 -- BANK of Communications's profit rose 41.83 percent in the first half amid growth on loans and fee-based income.
Net profit increased to 8.56 billion yuan (US$1.14 billion), or 0.18 yuan a share, from 6.03 billion yuan, or 0.13 yuan a share, a year ago, the Shanghai-based lender said in a statement yesterday, citing figures on international accounting standards.
Net interest income grew 28.3 percent to 23.54 billion yuan. The bank's outstanding loans grew 22.3 percent from the beginning of the year to 1.11 trillion yuan, while deposits increased 22.14 percent to 1.65 trillion yuan in the same period.
Qiu Zhicheng, a Haitong Securities Co analyst, said he had expected the profit growth to be 50 percent.
The bank said except for a one-off taxation payment, its profit rose 63.13 percent year on year. The bank paid a one-time increase in income tax of 1.29 billion yuan due to impending tax-rate rules changes.
Net fee-based income, including selling wealth-management products, more than doubled to 3.1 billion yuan.
Individual assets under its management topped 101.9 billion yuan, with new assets adding 98.4 billion yuan in the first half.
The bank, 18.6 percent held by HSBC Holdings Plc, is grabbing more market share in consumer lending with HSBC's expertise and its own network of 2,600 outlets nationwide to develop fee-based services, including credit cards and cash management.
The bank moved into the credit-card segment in July, 2005, and had issued 3.01 million cards at the end of June, 870,000 of which were issued in the first half.
Its capital adequacy ratio, the core gauge of financial strength, grew to 14.17 percent at the end of June, up from 10.83 percent at the beginning of this year.
The capital far exceeds the eight-percent regulatory minimum.
Its cost-to-income ratio dropped 10.68 percentage points in the first half to 36.98 percent.
The bank's share price tumbled 4.9 percent to 12.62 yuan yesterday in Shanghai. The benchmark Shanghai Composite Index dropped 2.14 percent to 4,765.45.
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