Asia Commercial Bank profit plunges 48 percent in 9M12
(17 December 2012 – Asia) Reporting its largest decline ever, Asia Commercial Bank (ACB)’s net profit plunged 48 percent year-on-year in September.
The loss was largely due to gold trading losses as the bank closed its short gold position on a directive from the central bank.
Net interest income grew 13 percent year-on-year as ACB’s loan book shrunk by 19 percent.
Loans to end customers rose 3 percent year-on-year, while interbank loans plummeted 50 percent causing overall loan decline rate to decline from an average of 80 percent in the past five years to 75 percent currently.
Non-interest income turned from a gain into a loss in September as fee income rose 12 percent but was still not enough to absorb a gold trading loss equivalent to 25 percent of ACB’s total income.
The massive losses arose because the bank was forced by the central bank to close its large, circa one million ton (according to market consensus) short gold position.
Expenses also surged for the bank, with operating and provision expenses up 50 percent and 90 percent year on year respectively.
Part of the reason for the jump in operating expenses was due to a 28 percent increase in the number of the bank’s employees as the bank grew its branch network by 20 percent.
Net interest income grew 13 percent year-on-year as ACB’s loan book shrunk by 19 percent.
Loans to end customers rose 3 percent year-on-year, while interbank loans plummeted 50 percent causing overall loan decline rate to decline from an average of 80 percent in the past five years to 75 percent currently.
Non-interest income turned from a gain into a loss in September as fee income rose 12 percent but was still not enough to absorb a gold trading loss equivalent to 25 percent of ACB’s total income.
The massive losses arose because the bank was forced by the central bank to close its large, circa one million ton (according to market consensus) short gold position.
Expenses also surged for the bank, with operating and provision expenses up 50 percent and 90 percent year on year respectively.
Part of the reason for the jump in operating expenses was due to a 28 percent increase in the number of the bank’s employees as the bank grew its branch network by 20 percent.
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