BEIJING (XFN-ASIA) - China Construction Bank (SHA 601939; HK 0939) said first half net profit rose 71.44 pct year-on-year to 58.667 bln yuan under both Chinese and international accounting standards, supported by a strong rise in net interest income and a sharp rise in fees.
In its interim report filed with the Shanghai Stock Exchange, the bank said operating revenue in the first half rose 36.12 pct year-on-year to 135.188 bln yuan.
Net interest income rose 24.5 pct year-on-year to 111.08 bln yuan in the first half, while net fee and commission income totaled 20.1684 bln yuan, up 59.3 pct from a year earlier.
At the end of June, the bank had outstanding loans of 3.5375 trln yuan, up 8.11 pct from the end of 2007, while outstanding deposits rose 8.48 pct to 5.7816 trln yuan.
Outstanding loans to the real estate sector stood at 333.177 bln yuan, accounting for 9.42 pct of the total, down slightly from 9.71 pct at end-2007.
The bank said non-performing loans (NPL) at the end of June totaled 78.113 bln yuan, down 7.057 bln from the end of 2007, with the NPL ratio falling to 2.21 pct from 2.6 pct.
Provision coverage stood at 117.23 pct at the end of June, up 12.82 percentage points from the start of the year, the bank said.
Earnings per share stood at 0.25 yuan in the first six months, against 0.15 yuan a year earlier.
The bank issued 3.01 mln new credit cards in the first six months, bringing its cards outstanding to 15.61 mln.
The capital adequacy ratio (CAR) was 12.06 pct at the end of June, down from 12.58 pct at the end of 2007, with core CAR at 10.08 pct, also down from 10.37 pct.
At the end of June, the bank's investments totaled 2.233 trln yuan, up by 30.94 bln yuan from the end of 2007, with investment in debt instruments increasing by 42.489 bln yuan to 1.656 trln yuan.
The bank held 28.085 bln usd in foreign currency-dominated debt at the end of June, including 273 mln usd of US sub-prime mortgage loan-backed securities, accounting for 0.97 pct of the total.
Allowances for impairment losses on such debt securities amounted to 671 mln usd at the end of June, up by 41 mln usd from the end of 2007, the bank said.
At the end June, the bank held 357 mln usd worth of ALT-A rated bonds, accounting for 1.27 pct of foreign currecy debt securities.
'As the above debt securities represent only a small proportion of the bank's foreign currency debt securities investment portfolio, market fluctuations for such debt securities will not have a significant effect on the bank's earnings,' the bank said.
The bank said face value of debt it holds involving US mortgage groups Fannie Mae and Freddie Mac amounted to 3.25 bln usd at the end of June.
The bank held debt with face value of a combined of 2.555 bln usd issued by the two companies, while it also held mortgage-backed securities guaranteed by them worth 695 mln usd, it said.
Its net foreign exchange exposure at the end of June was equivalent to 36.567 bln yuan.
Earnings per shares stood at 0.25 yuan, against 0.15 yuan a year earlier.
The bank said uncertainties in economic and financial environment at home and overseas are likely to increase in the second half of the year. However, the bank believes the fundamentals of China's economy will remain unchanged.
It did not provide an earnings forecast for the rest of the year.
(1 usd = 6.85 yuan)
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