China Merchants Bank : First-Half Net Profit Fell 1.6%

By Ben Otto

China Merchants Bank Co.'s net profit in the first half of the year fell 1.6% compared with the same period a year earlier as higher operating costs and expected credit losses amid the Covid-19 pandemic offset a rise in operating income.

Net profit was 49.79 billion yuan ($7.25 billion), the Chinese lender said late Friday.

Net interest income rose 4.0% to CNY90.87 billion, while net non-interest income rose 12.5% to CNY57.29 billion, it said.

Expected credit losses for the period rose 22% to CNY40.44 billion as the bank increased its allowances due to the impact of the Covid-19 pandemic. The bank's nonperforming loan ratio at the end of June stood at 1.14%, down 0.02 percentage point from the end of December.

Going forward, the bank said that global recovery amid the pandemic "is likely to be slow and will take a long time," hurting the Chinese economy.

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