Bank of Communications (BoCom; 601328.SH, 3328.HK) said its first-half net profit reached US$3 billion, up 30% year-on-year, while China Merchants Bank (CMB; 600036.SH, 3968.HK) recorded a 60% jump to US$1.9 billion, the Wall Street Journal reported. The strong results come as analysts lower bank full-year earnings forecasts as interest rate hikes become less likely and bad loan provisions rise amid heightening regulatory scrutiny of the sector. Helped by a slightly tighter credit environment, which improved banks’ ability to price loans, BoCom’s net interest income increased 34% to US$5.8 billion. CMB’s net interest income grew 41% to US$3.9 billion, a reflection of smaller banks’ ability to charge small- and mid-size companies higher interest rates. Industrial and Commercial Bank of China (601398.SH, 1398.HK) said it had won regulatory approval to raise as much as US$10 billion through debt and equity sales. BoCom and CMB have already completed capital-raising activity.
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