Bank of Communications to Report First-Half Results

Bank of Communications is set to release its first-half results on Friday. Here are the key details:

Net Profit Forecast According to a poll of analysts by Visible Alpha, Bank of Communications is expected to report a 15% increase in net profit to 46.69 billion yuan ($6.41 billion) for the six months ending June 30. This compares to a net profit of CNY40.52 billion in the same period last year.

What to Watch

1. Interest Income The Visible Alpha poll estimates that first-half net interest income may have dropped 4.0% compared to the previous year, reaching CNY81.72 billion. Investors are particularly focused on this aspect as interest rates in the country have been declining over recent quarters. In the first quarter, net interest income decreased 4.4% from the prior year to CNY40.65 billion.

2. Credit Cost First-quarter credit impairment losses declined 0.1% to CNY15.40 billion, compared to the same period last year. Investors are closely monitoring the size of any credit costs amid the economic recovery from the Covid-19 pandemic and related restrictions experienced last year.

3. Asset Quality The non-performing loan ratio fell slightly from 1.35% at the end of 2022 to 1.34% at the end of March. Investors are paying attention to the overall asset quality and changes in non-performing loan ratios in specific sectors, such as real estate and manufacturing.