Merchants Bank says Q1 interest income, fees soar

SHANGHAI, April 23 (Reuters) - China Merchants Bank (3968.HK: Quote, Profile, Research, Stock Buzz), China's sixth-largest lender, said net interest income advanced 74 percent year-on-year in the first quarter, while fee and commission income jumped 103 percent.

The sharply higher first-quarter net interest income, which hit 11.87 billion yuan, was due in part to loan growth and wider net interest margin, it said in a filing with the Shanghai stock exchange after the A-share market closed on Tuesday.

The company (600036.SS: Quote, Profile, Research, Stock Buzz), whose net profit soared 157 percent in the first quarter, also said net fee and commission income more than doubled to 1.93 billion yuan in the first quarter from 950 million yuan in the year-earlier period.

China Merchants Bank, based in the southern China boom town of Shenzhen, on Tuesday posted net profit of 6.3 billion yuan ($901 million), or 0.43 yuan per share, for the three months ended on March 31, compared with 2.46 billion yuan, or 0.17 yuan per share, a year earlier, based on Chinese accounting standards.

The bank estimated previously that its net profit would surge at least 140 percent in the first quarter of this year based on Chinese accounting standards.

Credit Suisse expects all Chinese banks will report very strong first-quarter results as margins continued to expand while credit costs remained muted, but growth rates are expected to decelerate after the first quarter as China moves to cool its economy and external demand weakens.

Merchants Bank said a lowering of China's corporate tax this year also contributed to its profit growth in the first quarter.

Its non-performing loan (NPL) ratio edged down 0.12 percentage points to 1.42 percent at the end of March, when its total NPLs stood at 10 billion yuan -- from the beginning of this year, it said in the filing with the Shanghai bourse.

Outstanding loans grew 4.50 percent in the quarter to 703.5 billion yuan at the end of last month, with retail loans accounting for 25.12 percent of the total, it said. Deposits rose 5.7 percent to 997.3 billion yuan.