Banks have worsening asset quality: Moody’s

CHINA’S banks are showing worsening asset quality and slowing profit growth, which are credit negative because they mean the end of a multi-year streak of improving financial performance, credit ratings firm Moody’s Investors Service said Thursday.

While the recent announcements of interim 2012 results by some Chinese lenders generally showed that nonperforming loan ratios are still low and profitability remains strong, there are evidence that higher nonperforming loan are in the pipeline, Moody’s said in a note.

China Cosco’s first-half loss widens

SHIPPING giant China Cosco Holdings Co. reported Thursday a wider loss for the first half of the year and said it would also likely post a loss for the January-September period.

The company, whose businesses include container and dry-bulk shipping, and port operations, posted a net loss of 4.87 billion yuan (US$766.9 million) for the first half, wider than the year-earlier net loss of 2.76 billion yuan. Cosco’s revenue from its dry-bulk shipping unit, the world’s largest by fleet size, fell 32 percent to 8.30 billion yuan in the first half because of an 18 percent drop in shipping volume, indicating weaker domestic demand.

AgBank net profit rises 21%

AGRICULTURAL Bank of China Ltd. (AgBank), the country’s largest rural lender by assets, said Thursday that its first-half net profit rose 21 percent from a year earlier, driven by growth in net interest income and fee income.

The bank said its net profit for the first half was 80.50 billion yuan (US$12.7 billion), up from 66.67 billion yuan a year earlier. The bank said its net interest income, which accounted for more than 70 percent of its operating income, rose to 167.69 billion yuan from 144.73 billion yuan, and its net fee and commission income rose to 38.93 billion yuan from 37.14 billion yuan.

SAIC Motor profit up 5%

SAIC Motor Co., China’s largest automaker by sales, Thursday reported a 5 percent rise in first-half net profit, outshining its domestic rivals as sales of cars made by its joint ventures remained solid despite an industry-wide slowdown.

Net profit was 10.78 billion yuan (US$1.7 billion), up from 10.26 billion yuan in the year-earlier period. The company has vehicle-making joint ventures with General Motors Co. and Volkswagen AG. The rise in net profit was in stark contrast to the 47 percent surge SAIC posted for the first half of 2011.