Bank of China Q3 earnings rise 23 percent

Photo: Bank of China Q3 earnings rise 23 percent

Third-quarter net profit of Bank of China Ltd. jumped 23 percent from a year earlier, thanks to higher net interest income and fee income.

The bank's net profit for the July-September period rose to 15.9 billion yuan (US$2.12 billion; EUR1.47 billion), under international accounting standards, from 13 billion yuan a year earlier, it said in a statement to the Hong Kong stock exchange.

Net interest income for the three months rose to 39.5 billion yuan (US$5.26 billion; EUR3.66 billion) from 32.5 billion yuan, it said in unaudited results, while net fee and commission income more than doubled to 7.2 billion yuan (US$960 million; EUR667 million) from 3.2 billion yuan.

The bank's net profit for the nine months ended Sept. 30 was 45.5 billion yuan (US$6.06 billion; EUR4.21 billion), up from 32.5 billion yuan a year earlier.

Bank of China said it charged an additional impairment allowance of US$322 million (EUR223.75 million) against its exposure to asset-backed securities and collateralized debt obligations supported by subprime mortgages in the U.S. during the third quarter.

The aggregate amount of such allowances was US$473 million (EUR328.68 million) at the end of September, it said.

The lender said the carrying value of its investment in subprime asset-backed securities was about US$7.5 billion (EUR5.21 billion), representing 2.9 percent of its total investment securities. Investment in subprime collateralized debt obligations was about US$496 million (EUR344.66 million), or 0.2 percent of its total investment securities.