Tuesday, April 28, 2015

Agricultural Bank of China profit up 1.3%

Agricultural Bank of China profit up 1.3%

[BEIJING] Agricultural Bank of China Ltd, China's third-biggest lender, reported a return to quarterly profit growth as an expansion in lending outweighed a 51 per cent jump in provisions for bad debt.
Net income for the three months through March 31 increased 1.3 per cent to 54.1 billion yuan (US$8.7 billion) from a year earlier, a Hong Kong exchange filing showed on Tuesday.
China's economy has cooled, expanding at the slowest pace since 2009 in the first quarter, and lenders face intensifying competition for funds as the government deregulates the finance industry. While two interest-rate cuts by the central bank since November may help to spur growth and limit corporate defaults, the reductions have also put pressure on banks' lending margins.
Net interest income rose 6 per cent to 109.4 billion yuan in the quarter from a year earlier as loans increased by 4.9 per cent. Bad loan provisions rose to 20 billion yuan. Nonperforming debt rose 12 per cent from the previous three months to 140 billion yuan, accounting for 1.65 per cent of the lender's total advances.
Earlier on Tuesday, the nation's fifth-largest lender, Bank of Communications Co, reported first-quarter net income rose 1.5 per cent from a year earlier, the smallest increase since the lender's profit decline in the fourth quarter of 2013.
The three other banks in China's top five - Industrial & Commercial Bank of China Ltd, China Construction Bank Corp and Bank of China Ltd - will release their earnings on Wednesday.
Agricultural Bank's shares have climbed 40 per cent in Hong Kong in the past year, outpacing the 29 per cent increase in the Hang Seng Index. The lender's stock has gained more in the mainland, while lagging behind the Shanghai Composite Index, which has more than doubled.
BLOOMBERG

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