China Construction Bank's Third-Quarter Profit Climbed on Lower Credit Costs

By Kosaku Narioka

China Construction Bank's third-quarter profit climbed thanks to lower credit costs, despite a drop in interest income owing to lower market interest rates.

The Chinese bank said Thursday that net profit increased 2.6% from a year earlier to 88.11 billion Chinese yuan ($12.04 billion) for the three months ended Sept. 30. That beat the estimate of CNY67.31 billion in a poll of analysts by Visible Alpha.

China Construction Bank said net interest income, the primary source of the bank's earnings, decreased 5.6% from a year earlier to CNY156.24 billion, as market interest rates have fallen. Net fee and commission income also declined 1.3% to CNY24.31 billion.

Meanwhile, credit impairment losses dropped 24% to CNY29.035 billion, helping the bank's bottom line, as the Chinese economy continues to recover from the slump caused by the pandemic and related restrictions.

The bank's nonperforming loan ratio was 1.37%, down slightly from 1.38% at the end of last year, as gross loans and advances to customers increased to CNY23.659 trillion, up 12% from the end of 2022.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

October 26, 2023 05:41 ET (09:41 GMT)

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