Bond Market News

Chinese banking majors Bank of China and Agricultural Bank of China beat earnings estimates. Bank of China reported a net profit rise of 2.9% to CNY 192.9bn ($29.4bn), beating an estimated 8% drop YoY. Net interest margins was almost flat at 1.85%. NPLs rose to 1.46% from 1.37% in 2019 while full year provision for bad loans and litigation losses came in at CNY 29bn ($4.4bn), up 16.5% from 2019. CET1 stood at 11.28% vs. 11.3% in 2019. The board recommended a final dividend of CNY 1.97 ($0.30) per ten shares. Bank of China’s bonds were stable with its 3.6% Perp at 103.2, yielding 2.7%.

Agricultural Bank of China reported a net profit rise of 1.8% YoY to CNY 215.9bn ($32.9bn), beating the 6% decline forecast. NPLs rose to 1.57% from 1.4% in 2019. Net interest margins were flat at 2.2% from 2.23% in 2019. CET1 stood at 11.04% vs 11.24% in 2019. The board recommended a final dividend of CNY 1.851 ($0.28) per ten shares. Its bonds were stable with its 1.2% 2025s at 98.48, yielding 1.55%.

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