Bank of Communications announced on Friday that its net profit for the first half of the year has risen by 4.9% compared to the previous year, boosted by gains from trading activities. Despite a decrease in net interest income, the Chinese bank managed to achieve a net profit of CNY 42.52 billion ($5.84 billion) for the six months ended June 30. However, this fell short of analysts' estimates of CNY 46.69 billion, according to a poll conducted by Visible Alpha.
Decline in Net Interest Income and Fee & Commission Income
During the first half, net interest income experienced a decline of 3.1% compared to the same period last year, amounting to CNY 82.39 billion. This can be attributed to the overall decrease in interest rates in the country in recent quarters. Additionally, net fee and commission income also dropped by 0.8% to CNY 24.58 billion.
Surge in Gains from Trading Activities
On the other hand, net gains resulting from trading activities saw a significant increase of 77%, reaching CNY 17.64 billion. This growth was driven in part by the successful equity investments of the bank's subsidiaries and gains from changes in fair value.
Decrease in Credit Impairment Losses
Credit impairment losses recorded a decline of 1.3% compared to the previous year, totaling CNY 36.35 billion. Bank of Communications maintained a nonperforming loan ratio of 1.35%, which remained steady from the end of 2022.
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