Bank of Communications, the mainland's fifth-largest lender, said yesterday its first-half earnings were almost unchanged from a year ago, as soaring loans and handsome fee income helped offset a narrower net interest margin.
The Shanghai-based bank earned 15.56 billion yuan (HK$17.65 billion) in the first six months of the year, a scant 0.3 per cent increase from a year ago.
'It was not easy to post flat first-half earnings in the current situation,' said Yu Yali, Bocom's chief financial officer. 'After all, interest income is still a major cash cow for Chinese banks.'
The lender's net interest margin dropped to 2.21 per cent from 3.16 per cent, a result of interest rate cuts by the central bank since late last year.
Bocom, 19.9 per cent owned by HSBC Holdings, had 29.8 billion yuan interest income, down 9.8 per cent year on year.
Fast credit growth stemming from the government's stimulus package offset the negative impact of the smaller interest margin. Outstanding loans at the end of June climbed 400.6 billion yuan, or 30.15 per cent, from the end of last year and topped 1.73 trillion yuan.
The bank's interest income made up 80 per cent of its total first-half operating income, Ms Yu said.
