BEIJING: China Merchants Bank, the sixth-largest commercial bank on the Chinese mainland, said its net profit grew by a slower 8.3 percent in the first six months of 2015 while bad loan ratio rose amid an economic downturn.
The Shenzhen-based lender’s net profit in the half year ended on June 30 was 32.98 billion yuan (US$5.1 billion), up from 30.5 billion yuan a year earlier.
Its total assets climbed 10.3 percent to 5.2 trillion yuan by June on an “increase of net interest revenue over the expansion of assets, rapid growth of intermediary business for wealth-management business and lower operational costs,” according to the bank’s statement to the Shanghai Stock Exchange yesterday.
Net interest income increased 17.7 percent to 66.1 billion yuan and net non-interest income jumped 35.1 percent to 38.3 billion yuan, the lender said. However, the bank warned in the earnings report that the high net interest income was not expected to continue.
“It is notable that the negative impact of the central bank’s interest rate cuts will become apparent gradually, which is expected to pressure the net interest margin in the second half,” the bank said.
Non-performing loan ratio of the bank edged up 0.39 percentage points to 1.5 percent from the level at the beginning of this year, with 76 percent of its 39.61 billion yuan bad loans by June chalked up mainly in the retail, manufacturing and mining industries.
