Bank of China records higher profit

Bank of China records higher profit

Wednesday, March 25, 2015 12:10 pm

The Bank of China (BOC), the country’s main foreign exchange bank, said Wednesday that its net profit rose more than eight percent last year, helped by expanding overseas business.

Net profit reached 169.60 billion yuan ($27.80 billion) last year, up from 156.91 billion yuan in 2013, according to a statement to the Hong Kong stock exchange, where it is listed.

“The operating environment for banks is undergoing immense and profound changes,” bank chairman Tian Guoli said in the statement. “Chinese economic growth has entered the new normal.”

The phrase is authorities’ preferred term for slower but hopefully more sustainable expansion. China’s gross domestic product grew 7.4 percent last year, the weakest in nearly a quarter of a century.

The Agricultural Bank of China, another of the country’s “Big Four” state-owned banks, on Tuesday reported a 7.9 percent rise in net profit last year to 179.46 billion yuan, citing the country’s weak economy.

BOC stock closed down 3.15 percent in Shanghai and fell 0.23 percent in Hong Kong on Wednesday before the earnings report was released.

But Tian said greater use of China’s yuan currency, also known as the renminbi (RMB), helped support BOC’s business last year.

“Following on the wheels of China’s diplomatic advances, we saw overseas markets as another major arena for business development,” he said.

“We pressed fully ahead with RMB internationalisation and continuously consolidated the market position of main business channels.”

China is seeking to make the yuan used more internationally in line with its standing as the world’s second-largest economy. Towards that goal, it has set up yuan clearing arrangements with several countries and signed currency swap agreements with a number of central banks.

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