Bank of China boosts its profits for first half of 2016 despite dip in net interest income

 
Hayley Kirton
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The bank's bottom line was boosted by the sale of Nanyang Commercial Bank (Source: Getty)

Bank of China reported a boost to profits in its interim results today, despite also reporting a small slump in net interest income.

The bank, which recently ranked number four in the world for tier one capital in a study by The Banker, reported profit attributable to shareholders of 93bn yuan (£10.6bn) for the first half of 2016, up 2.5 per cent from 90.7bn yuan the year before.

On the other hand, net interest income had dropped to 154.9bn yuan, slipping 5.2 per cent from 163.4bn yuan last year. However, other streams of revenue proved more lucrative for the lender, as operating income improved to 262.6bn yuan, up 9.9 per cent from 238.9bn yuan.

In particular, the bank reported gains on disposal of subsidiaries, associates and joint ventures worth 29.1bn yuan during the period, mainly relating to the sale of Nanyang Commercial Bank.

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Shares in the company on the Hong Kong stock exchange closed up 1.5 per cent at HK$3.45.

Assessing the global economic landscape, the bank's management wrote in the results statement:

In the first half of 2016, the global economy remained sluggish, and the international trade continued to shrink. In the US, economic growth slowed and employment growth declined. The Eurozone economy experienced a mild recovery, but deflationary pressures persisted. Japan's economy was relatively depressed and appreciation pressures on the Japanese yen intensified. Growth in emerging economies slowed down and Russia and Brazil continued to be in recession.

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