https://www.oann.com/chinas-bank-of-communications-boss-warns-of-tough-year-ahead/?utm_source=rss&utm_medium=rss&utm_campaign=chinas-bank-of-communications-boss-warns-of-tough-year-ahead

People visit the Bank of Communications’ booth at the 2021 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 3, 2021. REUTERS/Florence Lo

March 25, 2022

By Zoey Zhang and Engen Tham

SHANGHAI (Reuters) – The president of China’s Bank of Communications Co Ltd (BoCom), on Friday warned it will be difficult for the lender to deliver satisfactory earnings this year.

“This year has been the most complex year in my nearly 30 years in this business,” bank president Liu Jun told a news conference following BoCom’s annual results.

Liu cited challenges including the resurgence of COVID in China, the conflict between Russia and Ukraine and its impact on supply issues, inflation and other domestic difficulties.

COVID is currently spreading in a number of China’s largest cities, such as Shanghai and Shenzhen, leading to partial lockdowns of airports, districts and inter-province travel.

Other difficulties the country is facing include a crackdown on the property sector, which has led to near-defaults by a number of developers.

The bank reported a full-year profit rise of 11.9% on Friday, beating estimates.

China’s sixth largest commercial bank by assets reported a full year net profit of 87.6 billion yuan, above an average estimate of 83.1 billion from 18 analysts polled by Refinitiv.

The non-performing loan ratio at BoCom was 1.48% by the year-end, compared to 1.6% three months ago, while the net interest margin (NIM), a gauge of bank profitability, stood at 1.56%, compared to 1.55% by the end of September, the bank said in an exchange filing.

The bad loan ratio at large commercial banks fell to 1.37% by the end of December, the lowest since the third quarter in 2019, while NIM steadied at 2.04%, data from the banking and insurance regulator showed.

The commercial banks made a total of 2.2 trillion yuan net profits in 2021, a 12.6% increase from 2020, according to the China Banking and Insurance Regulatory Commission.

BoCom reported a fourth-quarter net profit of 23.2 billion yuan ($3.65 billion), a 9.2% drop from 25.6 billion a year earlier, Reuters calculations showed.

($1 = 6.3633 Chinese yuan renminbi)

(Reporting by Zhang Yan, Engen Tham; editing by Jason Neely an Barbara Lewis)

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