Lender posts 20pc profit surge
China Construction Bank, the world's second-largest lender by market value, posted a 20pc gain in second-quarter profits, as economic expansion boosted demand for loans and other financial services.
Net income climbed to 35.6 billion yuan (€4.1bn) from 29.55 billion yuan a year earlier. Chinese lenders, including Construction Bank and China Merchants Bank, have reported rising profits as they earned more on loans, helping allay concerns that a government crackdown on property speculation would crimp earnings.
Construction Bank is raising as much as 75 billion yuan in Asia's biggest-ever rights offer to replenish capital.
China's banks are a "very attractive buy", Alistair Scarff, a Hong Kong-based analyst at Merrill Lynch said.
Construction Bank's Hong Kong-listed shares have dropped 2pc this year, compared with a 4.1pc decline in the local benchmark Hang Seng Index.
China's banking regulator last month told banks to conduct a new round of stress tests that assume housing prices may drop as much as 60pc in some cities where prices had risen excessively. (Bloomberg)