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Bank Of China Ltd 03988

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Earnings Growths of Large Banks Are Expected To Recover to Beyond the Pre-Pandemic Level in 2019

Iris Tan, CFA Senior Equity Analyst

Analyst Note

| Iris Tan, CFA |

While there was little surprise in most Chinese banks' first-quarter results, we saw increasing divergence in performance among banks. We believe top-line growth was the key differentiator and this will continue to be reflected in the future growth trend. Net interest margins, or NIMs, remained pressured while credit quality improved. We believe the credit cycle that has hampered Chinese banks’ earnings growth since 2014 is about to turn for the better, while we stay cautious in our credit quality assumptions primarily on short-term pressure from bank wealth management product, or WMP, transition. We expect NIMs to rebound, with a modest decline in full year credit cost from 2020. 

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Company Profile

Business Description

Headquartered in Beijing and founded in 1912, Bank of China has evolved as a central bank, international exchange bank, and state-owned bank specializing in foreign trade business. BOC was listed on the Hong Kong and Shanghai stock exchanges in 2006. It provides a comprehensive range of financial services to customers across greater China and overseas. Central Huijin, a Chinese state-owned investment company and BOC's largest shareholder, controls 68%.

Contact
1 Fuxingmen Nei Dajie
Beijing, 100818, China, People's Republic of
T +86 1066596688
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 309,084

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