CMB posts strong profit increase
(23 August 2017 – China) China Merchants Bank posted an 11.4 percent increase in profits for the first half of 2017 compared to the same period last year.
China Merchants Bank made pre tax profits of 39.26 billion yuan (A$7.48 billion) in the first six months of the year, up from the 35.2 billion yuan in the year-earlier period.
The bank said the bump was on the back of higher net interest income and improved asset quality.
The bank saw its net interest income improve in the first half of the year to 70.9 billion yuan, 5.1 percent higher than the same period last year.
China Merchants Bank’s net interest margin (NIM) was 2.5 percent, 2 basis points higher than at the end of the first quarter.
The bank’s non-performing loan ratio dropped by five basis points in the second quarter, finishing at 1.71 percent for the period. The result outperformed the sector average of 1.74 percent announced earlier in the week, unchanged from the previous quarter.
China Merchants Bank reported that asset quality in the mining sector was particularly poor, with an NPL ratio of 14.1 percent on loans in this industry at the end of June, though it was an improvement on June 2016.
On a regional basis, a higher proportion of loans to western China and north eastern China went bad – NPL ratios of 4.19 per cent and 2.53 per cent respectively at the end of June. In contrast loans in the Pearl River and Yangtze delta regions saw better asset quality, with NPL ratios at the end of June of 1.41 and 1.43 respectively.
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