China Construction Bank, the country's second-largest lender by assets, posted a 47 percent jump in first-half profit, boosted by higher fee income and margins, despite Beijing's efforts to curb lending growth to prevent its economy from overheating.
Construction Bank, like its rivals, aims to expand its revenue base beyond its core corporate lending operations as Beijing tries to clamp down on excess liquidity in the world's fourth-largest economy. Construction Bank, which is 8.5 percent owned by Bank of America, said on Sunday it earned 34.22 billion yuan (US $4.5 billion) in the first six months of 2006, compared with 23.22 billion yuan in last year's first half.
The earnings exceeded the average forecast of 33.8 billion yuan by five analysts polled by Reuters. By comparison, larger rival Industrial & Commercial Bank of China reported a 62 percent increase in first-half profit on Thursday, while Bank of China, the country's No 4 lender, posted a 52 percent rise in first-half earnings.
Chinese bank stocks are among the world's most expensive, as investors view the sector as a proxy for economic growth.
Construction Bank's market capitalisation of US $168.5 billion ranks it sixth in the world, just behind Bank of China. The lender's net interest income rose 37 percent to 89.2 billion yuan in the first half, while net fee and commission income doubled to 12.66 billion yuan.
The state-run lender plans to join its big rivals on the Shanghai stock exchange by selling up to 9 billion domestic A-shares, which would be worth US $6.75 billion based on the company's current share price.
Shares in Construction Bank, have surged 18 percent in Hong Kong this year, outperforming a 14.8 percent increase in the benchmark Hang Seng Index during the same period.
Comments
Comments are closed.