CCB (China Construction Bank) is confident that it will increase its net profits for the whole year, although it will slow down the growth of individual housing loans in the second half of 2009, said Guo Shuqing, board chairman of CCB on August 24.
CCB's semi-annual report shows that in the first half, the bank achieved 55.84 billion yuan net profit, a drop of 2.85 billion yuan or 4.86 percent year-on-year. The net interest margin dropped by 82 basic points year-on-year to 2.34 percent, while the return rate for net interest income fell by 83 basic points year-on-year to 2.46 percent.
Guo said that the factors causing CCB's net profit to decline mainly include the widening floating ranges of the basic interest rate, the lending rate and individual housing loans, as well as an increase in provisions.
In the first half, CCB's provision coverage ratio reached 150.51 percent, up nearly 20 percentage points over the beginning of the year and ranking first among China's five largest commercial banks. Guo is confident about CCB's performance growth for the whole year. CCB is relatively prudent and its increase in provisions aims to cope with extremely complex situations.
CCB president Zhang Jianguo disclosed that so far, CCB has examined reserve loan projects totaling more than 700 billion yuan. CCB is scheduled to issue 900 billion yuan of new loans for the whole of 2009.
In the first half, CCB ranked fourth among large banks in terms of loan issuance and ranked second in terms of loan increment.
CCB Vice President Chen Zuofu said that the individual housing loan is a strategic business which will be given certain strategic support by CCB. In the second half, loans will be mainly issued for first and second-hand houses, which have relatively lower risks and higher profit margins.
In the first half, loan growth was relatively rapid but will slow down slightly in the second half. The possibilities of adjusting interest rate, scale and other aspects will not be excluded.
By People's Daily Onine