Oct. 27 (Bloomberg) -- China Citic Bank Corp., a unit of the nation’s largest state-owned investment firm, rose to the highest in almost two months in Hong Kong trading after third- quarter profit beat analysts’ estimates.
The shares gained 6 percent to HK$4.22, the highest since Sept. 1, as of 9:48 a.m. local time. Net income rose 41 percent from a year earlier to 9.2 billion yuan ($1.4 billion), the Beijing-based bank said in a statement yesterday. That beat the 7.6 billion yuan median estimate of eight analysts surveyed by Bloomberg News.
“China Citic Bank’s results revealed positive surprises across the board,” Warren Blight, a Hong Kong-based analyst at Keefe Bruyette & Woods Inc., wrote in a research note. “Revenue growth was strong where it counted and was well supported by sizeable reductions in expenses and credit costs.”
The lender, controlled by China Citic Group, said the nonperforming loan ratio fell by 7 basis points to 0.6 percent at the end of September. Provisions set aside against bad debts increased to 250.26 percent. A basis point is 0.01 percentage point.
“We have some concern about the sustainability of a few of the drivers, but broadly speaking rate this results as ‘job well done’,” said Blight.
The benchmark Hang Seng Index rose 0.9 percent. Bigger rival Agricultural Bank of China Ltd., which reported yesterday that third-quarter earnings climbed 40 percent, advanced 4.2 percent to HK$3.44.
--Editor: Chitra Somayaji
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