CHINA CITIC BANK (998) H1 2018 earnings summary

Executive summary

• H1 2018 emphasized higher-quality growth, strategy execution and improved profitability; ROA, ROE, net operating income and NIM rose YoY.

• Net profit attributable to shareholders was CNY 25.72bn; asset quality actions brought overdue loans past 90 days into NPLs under regulatory requirements.

• Priorities for H2: grow deposits, manage NPLs, strengthen compliance and advance fintech-led development.

Financial highlights

• Net operating income was CNY 81bn, up 5.85% YoY; profit before provision was CNY 88bn, up 5.53%.

• Net profit attributable to shareholders grew 4.7% YoY; non-interest income reached 38.55% of income, up 3 percentage points YoY.

• Total assets were CNY 5.8tn, up 2.3% from end-2017; personal loans grew 5.2% over the same period.

• Personal deposits reached CNY 657bn, up 23.2% from end-2017; credit card transactions totaled CNY 961bn, up 45%.

Outlook and guidance

• FY asset growth target: 4%-8%; H2 deposits expected to increase CNY 280bn, with debt issuance also planned.

• NIM could continue rising, though deposit-cost increases and slower deposit growth pose H2 pressure; outlook depends on market rates and monetary policy.

• H2 corporate credit focus includes infrastructure, high-tech and high-tech medicine, and private businesses; inclusive finance and consumption-upgrade lending are also priorities.

• H2 asset quality expected to remain stable and controllable; NPL generation was reported at 1.19, down 0.26 percentage points from the start of the year.

• Real estate loans targeted for zero growth in H2; aiBank assets expected to reach CNY 26bn-CNY 28bn by year-end.