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| BOC Notches up 28% Profit Rise |
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Through steady loans growth Bank of China (BOC), the mainland's second-largest lender, posted a better than expected 28 percent rise in its first-half earnings yesterday. Also the mainland's top foreign exchange lender BOC notched up a net profit of 19.5 billion yuan (US$2.45 billion) in the first half compared with 15.2 billion yuan (US$1.9 billion) a year ago. The country's booming economy with 10 percent-plus growth assisted the bank's lending business and boosted its earnings from net interest. BOC's total loans rose 7.6 percent to 2.4 trillion yuan (US$300 billion) from the end of 2005. Its mainland loans grew 9.6 percent. Net interest income rose 12.3 percent to 54.82 billion yuan (US$6.85 billion) from a year earlier while non-interest income increased 16.9 percent to 14.68 billion yuan (US$1.835 billion). But analysts said the business environment for mainland lenders was not as good as it had been and cited the central bank's interest rate rise and credit tightening. "Investors have doubts about how these lenders will do under the ongoing macroeconomic controls," said Fu Hung-man, an analyst with Polaris Securities. "BOC along with the other banks could slow down a bit due to the tightening policies," he added. But the bank said the government's move to prevent the economy from overheating by curbing easy credit wouldn't have a big impact in the second half. "We've a diversified range of products and we don't solely depend on loans," said President Li Lihui. "Our loans growth in the first half was slower than that of China Construction Bank (CCB) or Bank of Communications but this is Bank of China's strategy to maintain stable loans growth," said Li. And BOC didn't "lend a lot in the overheated sectors" which would help it avoid any negative impact from the current tightening steps, he added. The bank is confident it'll meet its target of earning 33 billion yuan (US$4.125 billion) for the full year set in its Li said CCB's recent acquisition of Bank of America's Hong Kong and CCB last week announced it would buy Bank of America ( BOC's Hong Kong-traded shares gained more than 13 percent from their IPO price of HK$2.95 (38 US cents) compared with a 10 percent increase in the shares of smaller rival CCB during that time. The bank raised a total of US$11.2 billion in its Hong Kong IPO in June and US$2.5 billion in a Its Hong Kong arm BOC Hong Kong (Holdings) Ltd, (
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