News >Bizchina

CITIC Bank H1 profit rises 45% to $1.6b on growth in loans

2010-08-12 10:06

China CITIC Bank Corp, the banking unit of China's largest investment firm, reported its first-half profit climbed 45 percent as an economic recovery boosted demand for loans and fee-based services.

Net income at the nation's seventh-largest lender by market value rose to 10.7 billion yuan ($1.6 billion), or 0.27 yuan a share, from a restated 7.35 billion yuan, or 0.19 yuan a share, a year earlier, the company said in a statement to the Shanghai stock exchange on Wednesday. That compares with the 8.8 billion yuan average of three analyst estimates compiled by Bloomberg.

The Beijing-based lender controlled by China CITIC Group joins rivals including China Minsheng Banking Corp and Huaxia Bank Co in reporting first-half profit growth as the nation's economy expanded 11.1 percent during the period. Domestic banks face rising credit risks as the economy may slow in the second half, Standard & Poor's said last month.

CITIC Bank advanced 127.2 billion yuan of new loans in the first half, taking the outstanding amount to 1.19 trillion yuan, according to the statement. It raised 16.5 billion yuan selling subordinated bonds in May to replenish capital.

The bank set aside 16.5 billion yuan to cover potential loan losses in the first half. Soured debt accounted for 0.81 percent of its total advances as of June 30, down from 0.84 percent three months earlier, according to the statement.

Chinese banks, most of which are state-controlled, extended 4.6 trillion yuan of new loans in the first half -- more than a third less than in the year-earlier period -- as the government imposed lending curbs to prevent asset bubbles and non- performing debts.

CITIC Bank's net interest income climbed 42 percent to 22.4 billion in the first six months, according to the statement. Fees and commissions from services such as credit cards, custodian services and mutual fund sales, gained 30 percent to 2.5 billion yuan.

Shares of CITIC Bank gained 1.1 percent in Shanghai, paring this year's decline to 30 percent.

Related News: