BOC net profit rises 16.6pc to beat market forecasts
Mainland bank posts profit of 34.8 billion yuan for quarter but analysts say slowing economy and tighter interest margins cloud prospects
Bank of China, the fourth-largest mainland bank by market value, beat market forecasts with a 16.6 per cent increase in third-quarter net profit from a year ago, but analysts say the slowing economy and tightening interest margins will weigh on earnings in coming quarters.
BOC, the first mainland bank to report third-quarter results, said net profit for the three months to September rose to 34.76 billion yuan (HK$43.16 billion) from 29.81 billion yuan a year ago, and was little changed from 34.84 billion yuan in the second quarter.
The median estimate of 10 analysts surveyed by Bloomberg was for a profit of 32.7 billion yuan in the third quarter.
Earnings at other large mainland banks' might be stronger than analysts' estimates because of higher net interest margins and a recovery in fee income that was suppressed by regulatory crackdowns, said Bill Stacey, an analyst at Keefe, Bruyette & Woods. "But the smaller banks could still suffer from low margins," he said.
BOC said in a statement to the Hong Kong stock exchange net profit reached 106.36 billion yuan in the first nine months of the year, an increase of 10.4 per cent from the same period last year.
The higher quarterly earnings were driven by a 14.5 per cent increase in net interest income to 65.39 billion yuan.
