Bank of East Asia Ltd (東亞銀行), Hong Kong’s third-biggest lender by market value, said first-half profit rose 49 percent as a stock market recovery spurred trading revenue.
Net income in the six months ended June 30 rose to HK$1.17 billion (US$151 million), or HK$0.64 a share, from a restated HK$785 million, or HK$0.43 a share, a year earlier, the bank said in a statement yesterday. Profit beat the HK$1 billion median estimate of seven analysts surveyed by Bloomberg.
Chairman David Li (李國寶), 70, vowed in March to rein in spending to help the bank recover from its first loss in four decades, caused by HK$1 billion in impairment charges and a 23 percent jump in expenses. Operating costs were little changed from the previous six months at HK$3.04 billion, the bank said.
Bank of East Asia “has controlled costs in a difficult economic environment,” said Nick Lord, an analyst at Macquarie Securities Ltd who has an “outperform” rating on Bank of East Asia, before the announcement.
The bank’s shares reversed earlier losses and gained 2.2 percent at 2:36pm after falling in morning trading. The stock has risen 77 percent this year, the third-best performance among 11 Hong Kong-traded financial companies tracked by the Hang Seng Finance Index, which rose 42 percent over the same period.
The bank posted a HK$746 million loss in the second half of last year after bad-loan charges more than doubled. It booked HK$3.5 billion of losses last year after selling all its holdings of collateralized debt obligations (CDOs). CDOs, which repackage bonds, loans and credit-default swaps and use the income to pay investors, plunged as lending froze after the collapse of Lehman Brothers Holdings Inc.
Year-earlier figures were restated because of “unauthorized manipulation” of the valuation of equity derivatives held by the bank, the statement said.
Bank of East Asia yesterday predicted a “continued recovery” in the global economy in the second half as the US starts to emerge from a housing-led slump.
The bank said impairment losses rose to HK$493 million from HK$315 million a year earlier. It made a gain of HK$874 million from trading, compared with a loss of HK$213 million. Net interest income fell to HK$3.23 billion in the first half from HK$3.48 billion a year earlier, while net fee and commission income dropped to HK$1.01 billion from HK$1.19 billion.
Operating profit from the bank’s mainland Chinese operation fell to HK$731 million from HK$842 million as non-interest income declined 35 percent to HK$184 million.
The bank and rivals such as HSBC Holdings Plc have been expanding in China in the past two years as the nation’s booming economy drove demand for loans and investment products.
Bank of East Asia, the first foreign lender to issue debit cards in China, last month raised 4 billion yuan (US$586 million) in Hong Kong selling bonds denominated in the currency for the first time. It also aims to sell shares in Shanghai by the second half of next year, deputy chief executive officer Brian Li (李民斌) said this month.
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
Nintendo Co hopes to match the runaway success of the Switch when its leveled-up new console hits shelves on Thursday, with strong early sales expected despite the gadget’s high price. Featuring a bigger screen and more processing power, the Switch 2 is an upgrade to its predecessor, which has sold 152 million units since launching in 2017 — making it the third-best-selling video game console of all time. However, despite buzz among fans and robust demand for pre-orders, headwinds for Nintendo include uncertainty over US trade tariffs and whether enough people are willing to shell out. The Switch 2 “is priced relatively high”
RSS