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China Guangfa Bank FY'15 net profit drops 24.7%

China GuangfaBank Co. Ltd.'s net profit for 2015 dropped 24.7%, as assetimpairment losses more than doubled on a year-over-year basis.

The bank's net profit fell to 9.06 billion yuan from 12.04billion yuan in 2014, according to its annual report. EPS for the full yeardropped to 59 fen from 78 fen.

Total operating expenses surged to 43.59 billion yuan from29.70 billion yuan in the prior-year period. The increase was mostly attributedto the rise in impairment losses, which climbed to 21.45 billion yuan from 9.35billion yuan in the prior-year period. The bank said it turned its focus onmaking provisions during the period amid the economic downturn.

Meanwhile, the bank's net interest income rose to 32.82billion yuan from 29.24 billion yuan, while net fee and commission incomejumped to 20.93 billion yuan from 14.64 billion yuan. Operatingprofit, however, dropped to 11.14 billion yuan from 14.94 billion yuan.

The bank's net interest margin dropped 1 basis point to1.84% at the end of the period.

As of the end of 2015, the nonperforming loan ratio climbedto 1.43% from 1.04% in the same period in 2014. The allowance coverage ratio ofNPL declined to 151.53% from 170.40% in 2014, while the allowance ratio oftotal loans rose to 2.16% from 1.77%.

The bank's core Tier 1 and Tier 1 capital adequacy ratiosboth dropped to 8.02% from 8.12% at the end of 2014. The capital adequacy ratioclimbed to 11.43% from 10.50% in 2014.

As of Feb. 5, US$1 wasequivalent to 6.58 Chinese yuan.