BoC (Hong Kong) Beats Interim Expectations

by Mary Swire, Tax-News.com, Hong Kong

29 August 2002

Bank of China (Hong Kong), which was successfully floated on the Hong Kong stock exchange last month, yesterday reported profits for the first half which were slightly better than forecast, although sharply lower than last year.

The SAR's second largest banking group (after HSBC) said net profit fell 18.5% year-on-year to HK$3.42bn ($439m). The bank said that non-performing loans fell to 8.97% in the first half from 10.99% at the end of December, although most of the fall was due to the transfer in June of bad loans to an off-balance sheet asset management company.

Net interest income fell 10.9% in the first half to HK$6.89bn and operating profit before provisions fell 15.7 per cent to HK$6bn, "mainly due to the sluggish Hong Kong economy and low interest rate environment," said Liu Jinbao, chief executive.

The bank's shares were unchanged yesterday at HK$8.65, slightly above their IPO price of HK$8.50.

Bank of China (Hong Kong) was formed last year through a merger of ten different Bank of China subsidiaries and affiliates in Hong Kong and Shanghai. Parent Bank of China says it has no plans to inject mainland banking assets into BoC (HK). Last month's IPO raised US$2.6bn for the parent bank, and was well over-subscribed, particularly by retail investors, who were allocated far more of the issue than had been proposed originally.

Recommended