China Merchants Bank posts 15.9% rise in half year profit

Midsize Chinese lender China Merchants Bank Co. posted a net profit of 30.46 billion yuan (5 billion U.S. dollars) in the first half of this year, a year-on-year increase of 15.9 percent.
The profit growth made it the best-performing lender among national-level Chinese commercial banks in the first half.
The growth rate was also 3.9 percentage points higher than that for the first half of 2013, according to a statement filed to the Shanghai Stock Exchange on Friday.
China Merchants Bank, the country's sixth-largest by assets, said the increased profit was driven by growth in net interest income and higher commission fees.
In the first six months of the year, the bank's net interest income rose 13.5 percent to 53.86 billion yuan, while net non-interest income soared 83 percent year-on-year to 30.4 billion yuan.
The bank, listed in both Hong Kong and Shanghai, also reported a 0.98-percent non-performing loan ratio as of June 30, 0.15 percentage points higher than that at the end of 2013.
The lender also said its impairment losses on assets stood at 16.3 billion yuan in the first half, soaring 229 percent from a year earlier. Impairment losses on loans, which jumped 228.5 percent year-on-year to 16.3 billion yuan, were to blame.
The bank attributed that to China's economic downturn, deteriorated loan quality and bad loans extended to overcapacity industries.
Most of China's commercial banks posted slowing profit growths and more bad loans in the first half of this year, as China's economic momentum remains sluggish.
The Chinese economy grew 7.4 percent year on year in the first half of 2014, slower than the official target of around 7.5 percent.