Bank of Jinzhou Co. Ltd. expects a net loss of approximately 500 million Chinese yuan to 1 billion yuan for the six months ended June 30, compared to a net profit of 4.34 billion yuan in the prior-year period.
The beleaguered bank also expects a net loss of around 4 billion yuan to 5 billion yuan for the full year ended Dec. 31, 2018, compared to a net profit of 9.09 billion a year earlier, according to an Aug. 20 release.
The net losses for the two periods are mainly due to higher provision of impairments of financial assets, increase in the outstanding balance of nonperforming assets, as well as the lender's adoption of the IFRS 9 accounting standards, the lender said.
Industrial & Commercial Bank of China Ltd. and China Cinda Asset Management Co. Ltd. said July 28 that their subsidiaries agreed to acquire stakes totaling 17.31% of Bank of Jinzhou. The transactions were seen as Beijing's latest efforts, through state-owned financial institutions, to help highly indebted small lenders and contain financial risks.
Bank of Jinzhou is expected to release its results for the 2018 full year and the six months ended June 30 before the end of August.
As of Aug. 20, US$1 was equivalent to 7.06 Chinese yuan.
