(Yicai Global) Aug. 31 -- Bank of China’s profit fell 11.5 percent in the first half from a year earlier, the first double-digit decline since the first quarter of 2009, because its loan impairment loss widened amid the coronavirus pandemic.

Net profit was CNY100.9 billion (USD14.6 billion) in the six months ended June 30, the Beijing-based bank said in an earnings report released yesterday. Revenue rose 3.2 percent to CNY285.7 billion (USD41.6 billion).

The loan impairment loss widened at Bank of China, one of the country’s big four state-owned banks, while its non-performing loan ratio was 1.42 percent at the end of June, compared with 1.37 percent at the end of last year. The bank also pointed to lower non-interest income and narrower net interest margins for its weaker performance.

The increase in loan impairment loss caused business outlays to jump, tallying CNY157.1 billion, up about 26 percent, some CNY60.7 billion of which was loan impairment, which vaulted 70 percent from last year.

Its provision coverage for non-performing loans rose to 186.5 percent, while the ratio was about 182.9 percent at the end of last year

Net interest income was CNY196.9 billion, up 8.4 percent, while non-interest income fell 6.6 percent at CNY88.8 billion. Lower profit from investments mainly precipitated the drop in non-interest income. Non-interest revenue of other types was CNY38.5 billion, a slump of about CNY6 billion.

The bank’s net interest margin reached 1.82 percent in the first half, down 0.01 point, mainly brought lower by the downward loan prime rate and the benchmark interest rate cut by the US Federal Reserve.

Bank of China’s capital adequacy ratio reached about 15.4 percent by June’s end, down 0.17 percentage points from last year’s end.

The overall value of loans to its customers was CNY14.04 trillion (USD2 trillion) as of the end of June saw 7.4 percent annual growth, with their deposits of CNY17.09 trillion up about 8.1 percent.

The bank did not provide a detailed earnings forecast.

Editor: Ben Armour