HONG KONG, Aug 29 (Reuters) - Hong Kong-based Bank of East Asia Ltd (BEA) on Wednesday reported a jump of 26 percent in first-half profit, helped by loan growth and a surge in fee income, but flagged the trade friction between China and the United States as a concern.
Net profit rose to HK$3.99 billion ($508.32 million) in the Jan-June period, compared with HK$3.17 billion a year earlier after the one-off gains it posted in that period from some business divestment, the lender said in a statement.
The profit, including the gains from asset sale last year, dropped 36 percent on-year.
The bank has survived as an independent lender in a market that is dominated by HSBC Holdings and Standard Chartered, while several of Hong Kong’s other family-owned firms have been put up for sale amid deteriorating business conditions.
Bank of East Asia, which counts Hong Kong and China as its main markets, said trade tensions between two of the world’s largest economies had affected business confidence, and economic growth in China was expected to slow in the second half of 2018.
The trade conflict escalated last week as Beijing and Washington heaped more tariffs on each other’s goods. Since early July, they have imposed tariffs on a combined $100 billion worth of each other’s goods.
“Looking ahead, the Mainland’s continuing de-leveraging efforts may be tested as the impact of trade tensions between China and the United States spreads to the broader economy,” the bank said.
“Hong Kong’s economy will be buffeted by both trade tensions and a likely increase in local interest rates in the second half of 2018, resulting in slower growth and pressure on asset markets.”
$1 = 7.8494 Hong Kong dollars Reporting by Sumeet Chatterjee, Editing by Sherry Jacob-Phillips
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