Bank of Communications 3328

Bank of Communications 3328

Postby winston » Tue Jul 08, 2008 3:25 pm

Not vested.

BROKER CALL - China's BoComm 2008-09 earnings forecasts raised - Macquarie

BEIJING (XFN-ASIA) - Macquarie Research said it has raised its 2008-09 earnings estimates on Bank of Communications by 7 pct and 4 pct, respectively, ahead of the company's first half to June results, which are expected to be released in August.

Macquarie added that it has lowered its target price on BoComm's Hong Kong-listed shares to 12.0 hkd from 12.40 hkd, but raised its rating on the bank to "outperform" from "neutral" following a 22 pct drop in its share price since the release of its first quarter results.

"We still have some residual concerns on funding costs and deterioration in the credit card book. As such, we prefer other China bank stocks over BoComm. Nevertheless, we view the recent share price fall as too steep, and raise our recommendation to 'outperform,'" Macquarie said in a note.

BoComm's Hong Kong shares were down 2.09 pct at 8.87 hkd this morning.

Macquarie added that it expects the bank's margins to trend flat or higher in the second quarter, helped by increased asset spreads, as loans reprice due to the credit crunch. The brokerage forecasts loans to grow 10.6 pct in the first half.

Meanwhile, Macquarie said BoComm's fee growth is expected to grow 67 pct year-on-year in the first half, with weaker mutual fund revenues offset by sales of other wealth management products, especially insurance.

BoComm's second quarter non-performing loan ratio is forecast to drop to 1.90 pct, although absolute NPLs are expected to rise modestly, Macquarie added.
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Re: Bank of Communications 3328

Postby winston » Tue Aug 05, 2008 11:10 am

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China's Bocomm says shareholder HSBC not selling after lockup ends - report

BEIJING (XFN-ASIA) - HSBC Holdings Plc will not sell its holding in Bank of Communications (BoComm) (SHA 601328; HK 3328) after a lock-up period expires, the official China Securities Journal reported, citing an unidentified BoComm executive.

"HSBC has promised repeatedly that it will hold BoComm's shares for a long term. It is also likely to raise stake in BoComm by buying additional H-shares, rather than A-shares," the executive was quoted as saying.

In August 2004, HSBC bought a 18.6 pct stake in Shanghai-based BoComm as the latter was pursuing a Hong Kong listing. HSBC's over 9.1 bln H-shares in the Chinese lender will come out of lock-up on Aug 18.

There have been rumors that HSBC will sell BoComm shares to boost its earnings.

Yesterday, HSBC Holdings reported a 29 pct drop in first-half net profit to 7.72 bln usd, mainly due to bad debts in its US operations and more asset writedowns.

According to the agreement signed in 2004, HSBC has the right to increase its stake in BoComm to up to 40 pct between Aug 18, 2008 and Aug 18, 2012.

However, under current Chinese banking rules, a foreign institution can hold no more than 20 pct of a Chinese bank, while overseas investors can hold a combined stake of up to 25 pct.
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Re: Bank of Communications 3328

Postby winston » Mon Mar 16, 2009 5:32 am

Provisions dim banking sector by Katherine Ng

Bank of Communications (3328) - the mainland's fifth-largest lender by market capitalization - is expected to report growth of more than 35 percent last year on the back of lower nonperforming loans coverage.

BoCom kicks off the 2008 reporting season for mainland banks on Wednesday.

The mid-sized lender is expected to record a net profit of 27.9 billion yuan (HK$31.6 billion) with loan growth of 23.5 percent, compared with 19.4 percent a year ago.

Its net interest margin would expand by around 28 basis points, Credit Suisse banking analyst Sherry Lin said.

Jasmine Lai of DBS Vickers says the increasing provision requirement will hit mainland banks' earnings by 10 to 20 percent, making 2009 a cautious year although the lending quota was lifted. Lai also said the China Banking Regulatory Commission's action highlighted worries that nonperforming loans are rising. Citi analyst Simon Ho agreed, saying earnings for the fourth quarter of 2008 would be mixed - positive on credit quality or loan growth but negative on interest margins.

Ho said fourth-quarter earnings will be weak, as provisions are expected to increase significantly.

Loan growth may surprise a little on the upside and nonperforming loans are likely to show only a minor quarter-on-quarter deterioration, he added.

Analysts forecast mainland lenders to record an average 35 percent earnings growth in 2008 after fourth-quarter earnings dropped by 40 percent from the previous a quarter and 20 percent from a year earlier.

Lin forecasts earnings at mainland lenders will fall this year for the first time since they listed in 2005 because of higher nonperforming loans and lower net interest margins.
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Re: Bank of Communications 3328

Postby winston » Tue Mar 17, 2009 10:21 am

DJ MARKET TALK: CS Tips Bank Of Communications FY Net Profit +38%

1456 [Dow Jones] STOCK CALL: Credit Suisse expects Bank of Communications (3328.HK) to report FY08 net profit rose 38% to CNY27.9 billion. Cuts 2008-09 EPS forecasts by 3.0%, 1.4%, mainly on higher impairment charges for bad loans.

"We remain cautious on medium-sized China banks, given their higher margin pressure and increased challenges to manage asset quality, given their higher exposure to SMEs."

Adds, BoComm's NPL coverage lower vs peers, provides less of a cushion as credit cost risks rise. Lowers target price to HK$4.05 from HK$4.11 based on 8X 2009E EPS forecast. Keeps at Underperform. Shares up 4.5% at HK$5.07.
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Re: Bank of Communications 3328

Postby winston » Thu Mar 19, 2009 4:38 pm

BoCom Shares Fall in Hong Kong on First Quarterly Profit Drop By Luo Jun

March 19 (Bloomberg) -- Bank of Communications Ltd., China’s fourth-largest lender by market value, dropped in Hong Kong after posting its first quarterly profit decline in almost three years as a slowing economy resulted in more provisions for bad loans.

The stock dropped 3.6 percent to HK$5.08 as of 10:18 a.m., set for its biggest fall in two weeks. The benchmark Hang Seng index was down 1 percent.

Chairman Hu Huaibang, who joined BoCom in September, faces the risk of rising defaults among borrowers and falling demand for wealth management services. A drop in the nation’s key interest rates as the central bank attempts to revive an economy growing at the slowest pace in seven years is also hurting the profitability of loans.

“The quality of earnings was poorer than expected. The bank missed on the two most important areas -- margin and asset quality,” Credit Suisse AG’s Hong Kong-based analysts Sherry Lin and Daisy Wu wrote in a note today. “We expect the weaker-than- expected results to put downward pressure on BOCOM shares and other mid-sized banks like China Merchants Bank.”

Net income dropped to 5.67 billion yuan ($830 million) in the three months to Dec. 31 from 5.79 billion yuan a year earlier, based on figures released by the Shanghai-based company after the market close yesterday.

The amount of impaired loans at the bank rose to 25.5 billion yuan as of Dec. 31, up 12 percent from the beginning of the year. Provisions for impaired loans rose two-thirds to 10.7 billion yuan in 2008, boosting BoCom’s bad-loan coverage ratio to 116.8 percent as of Dec. 31.
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Re: Bank of Communications 3328

Postby winston » Thu Aug 06, 2009 4:49 pm

Wonder whether they have written off this US$700m loan ? However, with the record amount of loans being lent out, the NPL ratio
( Non-Performing Loans divided by Total Loans ) would be dropping, until some of those new loans become NPL :P

===================================================

China suffers 1.43 bln dlr bank fraud: reports

A Chinese businessman is on trial in China's biggest suspected bank fraud case involving as much as 1.43 billion dollars, the Financial Times reported Thursday.

Wang Sheng, former chairman of property developer Canton Property Investment Ltd, allegedly obtained about 4.8 billion yuan (700 million dollars) of illegal loans from state-controlled Bank of Communications, which is 18.6 percent owned by HSBC.

http://sg.biz.yahoo.com/090806/1/4ptj6.html
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Re: Bank of Communications 3328

Postby winston » Wed Aug 19, 2009 9:18 pm

Bank of Communications Profit Surpasses Estimates (Update1)

Aug. 19 (Bloomberg) -- Bank of Communications Ltd., China’s fourth-largest publicly traded bank, posted second-quarter profit that beat analysts’ estimates, helped by record credit growth and an increase in fee-based services.

Net income was little changed at 7.62 billion yuan ($1.1 billion), or 0.16 yuan a share, the Shanghai-based company, also known as BoCom, said in a statement today. That was higher than the average estimate of 7.24 billion yuan from nine analysts in a Bloomberg survey.

Chairman Hu Huaibang joined peers in China in extending a combined $1.1 trillion of credit in the first half to counter pressure on lending margins and support the nation’s $585 billion economic stimulus package. The economic revival, starting with the 7.9 percent expansion in the second quarter, and the addition of more fee-based services by the bank may lead to better results in the second half, Hu said today.

“The strong credit growth will benefit the bank’s earnings for the rest of this year,” said Lee Yuk Kei, a Hong Kong-based analyst at Core Pacific Yamaichi International Ltd. “The pickup in fee income is quite remarkable since they didn’t just rely on stock brokerage commission, but rather from a more diverse base,” including credit cards, the analyst said.

Outstanding loans at BoCom, part-owned by HSBC Holdings Plc, rose 31 percent from the beginning of the year to 1.7 trillion yuan at the end of June, according to today’s statement. The bank’s impaired loans accounted for 1.51 percent of total advances, compared with 1.92 percent by the end of December.

“The industry has stabilized along with the economy after reaching a trough in the first quarter,” said Wu Yonggang, an analyst at Guotai Junan Securities Co. “Key indicators of loan growth, margins and fee income all point to an uptrend.”

He estimates Chinese banks will post an average 15 percent to 20 percent increase in earnings next year.

Fees and Commissions

Bocom’s net interest income, or the revenue from lending minus interest paid to depositors, fell 8 percent to 15.2 billion yuan in the quarter, BoCom said. Fees and commissions, including from credit cards, distribution of mutual funds and insurance policies, gained 17.7 percent to 3.1 billion yuan.

The bank aims to start its own insurance operation by the end of the year, taking a step closer to becoming a one-stop financial services firm, Vice President Dicky Yip said last week.

BoCom’s net interest margin, a measure of lending profitability, contracted to 2.21 percent in the first half, compared with 3.02 percent in 2008. The margin should improve in the third quarter as interbank interest rates rise while funding costs drop, Credit Suisse analysts Sherry Lin and Daisy Wu said in a report on Aug. 12.

Chinese banks paid 0.36 percent on demand deposits and 2.25 percent on one-year time deposits after the People’s Bank of China cut interest rates five times in the final four months of last year.

Concerned that too many loans may be stoking speculation on property and stocks, the China Banking Regulatory Commission last month required the nation’s lenders to raise reserves to 150 percent of their non-performing loans by the end of this year, up from 134.8 percent at the end of June.

BoCom set aside 2.6 billion yuan of provisions against soured debt in the first half, compared with 2.2 billion yuan a year ago.

The lender earned 15.56 billion yuan in the first half, up 0.3 percent from a year earlier. Profit in the year-earlier second-quarter was 7.615 billion yuan.

http://www.bloomberg.com/apps/news?pid= ... JeDio5q1Vo
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Re: Bank of Communications 3328

Postby winston » Thu Jan 21, 2010 10:26 am

Not vested. From Phillips:-


Risk

Systematic risks of the management of hybrid operation may increase, such as the structural integration of the products, cost control and so on.


Valuation

In all, we still hold an optimistic view on the Group's future performance. Compared with the peers, BoCom owns the unique advantages mixed with the stability of state-owned commercial banks and the flexibility of joint-stock commercial banks.

Additionally, the opening of Shanghai Expo in 2010 will also be very helpful for improving the brand image of BoCom, and brings the positive effects to the Group's development in future.

We estimate net profits of BoCom would achieve to RMB30.9 billion in 2009, increase by 8.87% yoy, with EPS of RMB0.63.

We maintain 12-month price of HK$11.40 on BoCom, around 31% higher than its latest closing price, corresponding to P/E 14x and P/B 2.7x for 2010 respectively, and maintain Buy rating.
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Re: Bank of Communications 3328

Postby winston » Fri Aug 31, 2012 3:27 pm

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BANKCOMM (03328.HK) target cut to $5.55 on credit risk, pressured ROE - BofA ML

Bank of America Merrill Lynch (BofA ML) said in a report that BANKCOMM (03328.HK)'s 1H results were stable, with net profit rising 17.8% year-on-year, 3-5% better than estimates.

BofA ML lifted the 2012 earnings forecast by 9%, and maintained 2013-14's.

However, the share placing pressures the ROE, and the 2012/13 ROE is expected to diluted by about 17% and 13%.

The target price was cut from $6.5 to $5.55. Coupled with the credit risk of the Yangtze River Delta region, the rating was remained Underperform.

During the period, the net interest margin (NIM) still rose 2.61% quarterly. However, the management expects that the NIM in the 2H will turn lower, hoping the fee income will restore to the level of the second quarter.

The non-performing loans increased by 4% quarterly, while the SMLs surged 23% half-yearly, higher than its peers.

The management expects the SMLs will remain stable in the 2H, and the rise in overdue and non-performing loans was due to the lack of basic economic recovery.

The Wenzhou's non-performing loan ratio reached 3.92%, an average level for the industry.

Source: AAStocks Financial News
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Re: Bank of Communications 3328

Postby winston » Fri Mar 27, 2015 4:02 am

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Lender keeps eye on risk as profits jump

Bank of Communications (3328) yesterday said net profit jumped 5.7 percent to 65.85 billion yuan (HK$82.2 billion) beating expectations despite its bad loan ratio rising to 1.25 percent, the highest level since 2010.

Net interest margin, a gauge on the profitability of loans, fell to 2.36 percent from 2.4 percent as at September 30.

President Peng Chun said as bad loans from Jiangsu and Zhejiang provinces climbed 2 billion yuan last year, the lender will closely watch for risks in certain industries.

Peng also said the narrowed interest margin was within expectations, and he expects it to continue tightening under the interest rate liberalization.

Net interest income at China's fifth- largest commercial bank by assets gained 3.15 percent to 134.48 billion yuan.

Net fee and commission income increased 14 percent to 29.6 billion yuan. Impairment losses on loans and advances to customers climbed 11.02 percent to 20.44 billion yuan.

Market rumors said Shanghai-based BoCom is eyeing a stake in mainland brokerage Huaying Securities.

The bank has appointed Shen Rujun and Wang Jiang as executive vice presidents.

Meanwhile, Wu Wei is appointed as chief financial officer.

The appointments are still subject to final approval by the China Banking Regulatory Commission.

Source: The Standard HK
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