BEIJING/SHANGHAI (Reuters) - China Construction Bank Corp (CCB) (601939.SS) (0939.HK), the country’s second-largest lender by assets, on Wednesday posted a 4.9% increase in first-half profit, but margins shrank for the third consecutive quarter.
Net profit rose to 154.19 billion yuan ($21.74 billion) for the January-June period from 147.0 billion yuan a year earlier, CCB said in a Shanghai Stock Exchange filing.
That implies a net profit of 77.27 billion yuan for the second quarter, up 5.5% from 73.2 billion yuan a year earlier, Reuters calculations showed, beating the average forecast from three analysts of a 4.4% rise.
Its net interest margin, a key measure of profitability, was 2.27% at end-June, from 2.29% three months prior.
In the first half, fee and commission income outpaced the growth of net interest income, the bank’s primary source of earnings.
“Fees generated by credit cards, insurance sales and bank consortium loans grew relatively fast,” the statement said.
CCB’s non-performing loan ratio was 1.43% at the end of June versus 1.46% at the end of March.
By the end of the June quarter, the non-performing loan ratio for the banking sector was 1.81%, data from the China Insurance and Banking Regulatory Commission showed, the highest since 2009.
When talking about the wider economic environment CCB said downward pressure was decreasing.
CCB’s Shanghai shares were little changed on Wednesday before the results. They have gained 9.11% in 2019, versus a 26.3% rise in the blue-chip CSI300 index, giving the bank a market value of 1.45 trillion yuan, Refinitiv data showed.
Reporting by Cheng Leng in Beijing and Engen Tham in Shanghai; editing by Jason Neely, Kirsten Donovan