Equity Analysis /
China

CN : Bank of China-A - PPOP struggles

    Michael Chang
    Michael Chang

    Equity Research Analyst, Banks and Insurance

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    CGS-CIMB
    30 August 2021
    Published byCGS-CIMB

    2Q21 net profit growth rebounded to 23.4% yoy (1Q21: 3.6% yoy; 1H21: 13% yoy), driven by falling impairment charges amidst improving asset quality. Unlike big bank peers, its 2Q21 pre-provisioning operating profit (PPOP) growth was subdued at 1.7% yoy, and similar to 1Q21’s 2.8% yoy. As we expect the base for 2H21F net profit growth to get more difficult, we maintain our 5% net profit growth forecast for FY21F. Reiterate Add rating with an unchanged TP of Rmb3.80.