- Bank of China’s net income for the financial year was 231.90 billion yuan, very close to the estimated 233.31 billion yuan.
- The net interest margin was 1.59%, slightly lower than the estimated 1.63%.
- Net Fee and Commission income was higher than expected, at 78.87 billion yuan compared to the estimated 73.9 billion yuan.
- Net interest income was also slightly lower than the estimate, with 466.55 billion yuan against the expected 467.38 billion yuan.
- The final dividend per share exceeded expectations, with 23.64 RMB cents compared to the estimate of 23.44 RMB cents.
- Impairment losses on assets were lower than anticipated, at 106.56 billion yuan instead of the estimated 110.75 billion yuan.
- The bank received 15 buys, 3 holds, and 0 sells.
Bank Of China Ltd (H) on Smartkarma
Bank Of China Ltd (H) has been receiving a lot of coverage from independent analysts on Smartkarma, a platform where top analysts publish research on companies. One recent report by Daniel Tabbush, a bear on the stock, highlights some concerning trends for the bank. These include a surge in the loan-to-deposit ratio (LDR) and a decline in net interest margin (NIM), which raises questions about the bank’s lending practices. Additionally, the return on equity (ROE) has been declining significantly, with high credit costs and lower profitability. The report also notes a sharp increase in Stage 3 loan write-offs, indicating potential credit quality issues.
According to Tabbush, these trends do not bode well for the long-term stability and earnings power of Bank Of China Ltd (H). The bank’s LDR expansion, which typically drives higher NIM, is not translating into better profitability. In fact, the bank’s ROE has dropped from 18% to 10% over the years, with a higher base of credit costs and increased geopolitical risk. This report serves as a cautionary note for investors considering the stock, as it highlights potential risks and weaknesses in the bank’s financials.
A look at Bank Of China Ltd (H) Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 5 | |
| Dividend | 5 | |
| Growth | 4 | |
| Resilience | 2 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 4.2 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Bank of China Ltd (H) has received high scores across the board according to the Smartkarma Smart Scores. This indicates a positive long-term outlook for the company. The bank received a perfect score of 5 in both the Value and Dividend categories, showcasing its strong financial standing and commitment to providing returns to its shareholders. Additionally, with a score of 4 in Growth, Bank of China Ltd is poised for continued expansion and success in the future.
However, the bank received a lower score of 2 in Resilience, which could indicate potential vulnerabilities in the face of economic downturns or other challenges. Despite this, Bank of China Ltd (H) still received a perfect score of 5 in Momentum, suggesting strong performance and potential for growth in the near future. Overall, Bank of China Ltd (H) is a well-established and reputable financial institution, providing a wide range of services to both individual and corporate customers globally.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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