China Construction Bank H (939) Earnings: FY Net Interest Income Misses Estimates

China Construction Bank H on Smartkarma

China Construction Bank H, one of the largest state-owned banks in China, has recently announced its plans to list its housing rental subsidiary, China Housing Rental. However, according to independent analyst Daniel Tabbush, this may not have a significant impact on the bank’s overall credit metrics. In his bearish insight report on Smartkarma, Tabbush points out that CCB’s credit costs have been on the decline, but its non-performing loans (NPLs) have increased significantly. This could lead to a potential weakening of the bank’s credit health, overshadowing any benefits from the subsidiary’s listing.

In his report, Tabbush also highlights that CCB’s loss NPLs have risen by 2.5 times from FY19 to 1H23, which is more than the 1.5 times increase in total NPLs. This indicates a potential deterioration in the bank’s loan quality, which could impact its credit costs in the future. With this analysis, Tabbush raises concerns about the sustainability of CCB’s declining credit costs and warns investors to keep a close eye on the bank’s credit metrics.

A look at China Construction Bank H Smart Scores

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

China Construction Bank H has been given an overall outlook score of 4 out of 5 on the Smartkarma Smart Scores, indicating a positive long-term outlook for the company. The bank has received high scores across all factors, with a perfect score of 5 in both value and dividend. This highlights the company’s strong financial performance and its commitment to providing returns to its shareholders.

The bank’s growth score of 4 reflects its steady expansion and success in the competitive banking industry. However, its resilience score of 2 suggests a potential vulnerability to economic downturns. Nevertheless, the company’s strong momentum score of 5 indicates that it is currently on a positive trajectory and has the potential for continued success in the future.

China Construction Bank Corporation is a leading player in the commercial banking sector, offering a wide range of products and services to both individual and corporate customers. Its three main business segments, corporate banking, personal banking, and treasury operations, demonstrate the bank’s diverse and comprehensive approach to serving its clients. In addition, the bank’s focus on infrastructure loans, residential mortgage, and bank cards further solidifies its position in the industry.

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