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Bank of East Asia H1 net profit falls 74.9% YOY, cuts interim dividend

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Bank of East Asia H1 net profit falls 74.9% YOY, cuts interim dividend

Hong Kong-based Bank of East Asia Ltd. reported a 74.9% year-over-year decline in net profit for the six months ended June 30, primarily due to a significant increase in impairment losses.

The bank's net profit fell to HK$1.00 billion from HK$3.99 billion in the year-ago period. EPS fell to 22 cents from HK$1.30, according to an Aug. 21 earnings report.

Net interest income for the period rose to HK$7.41 billion from HK$6.25 billion, while net fee and commission income inched up to HK$1.37 billion from HK$1.36 billion. Net trading profits fell to HK$416 million from HK$556 million.

Net interest margin for the period stood at 1.90%.

The bank posted impairment losses of HK$5.06 billion for the first half, up sharply from HK$283 million a year earlier.

Operating income increased to HK$10.10 billion from HK$8.53 billion. Operating expenses climbed to HK$4.92 billion from HK$4.19 billion, mainly due to expenses incurred for new business initiatives and partnerships in mainland China.

At the end of June, the bank's total capital ratio stood at 20.3%, slightly down from 20.8% as of Dec. 31, 2018. Its Tier 1 capital and common equity Tier 1 capital ratios fell to 17.3% and 15.3%, respectively, from 17.8% and 15.7%, respectively, during the same period.

In addition, the bank declared an interim dividend of 11 cents per share, down from 51 cents per share in the prior-year period.