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Banks reap higher net profits Bank of China (BOC) Hong Kong and ICBC (Asia) - the Hong Kong units of two of China's largest banks - yesterday reported higher net profits for fiscal 2003.
BOC Hong Kong's results beat expectations - 25 analysts polled by Reuters forecast HK$7 billion (US$897 million); while ICBC Asia's results were below the HK$530 million (US$64.9 million) market consensus. BOC Hong Kong attributed profit growth to higher wealth-management income, cost control - operating expenses fell 6.1 per cent to HK$5.66 billion (US$725.6 million) - and lower charges for bad and doubtful loans. Bad debt charges were down 41 per cent to HK$1.67 billion (US$214.1 million). Citing analysts, Reuters said BOC Hong Kong still had one of the highest non-performing loan (NPL) ratios among listed lenders - 5.78 per cent at the end of 2003 compared with 7.99 per cent a year earlier. Net interest income fell by an undisclosed margin to HK$12.87 billion (US$1.65 billion), the bank said in a brief statement. Its shares fell 1.3 per cent in the morning, but rebounded in the afternoon to close at HK$14.65 (US$1.88). ICBC Asia shares fell 2.6 per cent to close at HK$11.25 (US$1.44). A 19 per cent rise - to HK$823 million (US$105 million) - in net interest income boosted by increased lending was behind its profit growth, ICBC Asia said. Loans grew 27 per cent to HK$68 billion (US$8.7 billion) last year. The provision for bad and doubtful debts fell 29 per cent to HK$129 million (US$16.5 million), with the NPL ratio at 1.7 per cent at the end of December compared with 2.3 per cent a year earlier. ICBC Asia agreed to buy the Hong Kong operations of the Belgian Fortis Bank for HK$2.16 billion (US$276.9 million) last December. The acquisition would raise the size of its assets, upon completion of the deal next month, from HK$66 billion (US$8.5 billion) to HK$95 billion (US$12.2 billion). |
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