KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
Four of China's five largest banks reported lower second-quarter profits, as they responded to government pressure to reduce lending rates to stimulate weak loan demand in a slowing economy and struggling property sector. Despite this, all five lenders announced interim dividends for the first time in over a decade.
Key Highlights:
Decline in Profits: Industrial and Commercial Bank of China Ltd (ICBC), the world's largest lender by assets, posted a 0.8% drop in Q2 net profit, while China Construction Bank Corp (CCB) reported a 1.4% decline. Bank of China (BoC) and Bank of Communications (BoCom) also saw lower Q2 profits, although Agricultural Bank of China (AgBank) reported a 14.2% increase.
Pressure on Net Interest Margins (NIM): ICBC and CCB experienced a narrowing of their net interest margins, a key measure of profitability, with ICBC’s NIM falling to 1.43% from 1.48% at the end of June. This trend is expected to continue in the second half of 2024 due to mortgage repricing and government efforts to lower borrowing costs to support the economy.
Higher Dividends Despite Challenges: Despite lower profits, all five banks announced interim dividends, reflecting a push by the Chinese government to boost investor returns. BoCom, for example, will make an interim cash payment of 0.182 yuan per share, totaling 13.52 billion yuan, to be distributed early next year.
Property Sector Impact: The banks face rising risks from bad loans in the property sector. While some, like BoCom, warned of increasing bad debt from developers, others, such as BoC, plan to boost mortgage lending and consumer loans despite falling demand. Residential mortgages have decreased to 17% of the Chinese banking sector's total loans by the end of 2023, down from 21% two years earlier.
Stability of Non-Performing Loans: Despite the challenges, non-performing loan ratios among the five largest banks remained stable or slightly decreased, though concerns about the property sector's contagion effects persist.
The banks’ profitability is under pressure from weak loan demand, lower lending yields, and higher dividend payouts, compounded by ongoing challenges in the property sector and the broader economic environment.
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