March 30, 2017 / 10:31 AM / 10 months ago

UPDATE 1-China Construction Bank expects 2017 interest margins to stabilize

(Adds comments on loan pricing, Huishan Dairy)

BEIJING, March 30 (Reuters) - China Construction Bank Corp (CCB) , the country’s second-biggest lender by assets, expects its 2017 net interest margin to narrow only slightly over the course of the year, the bank said on Thursday.

The bank’s net interest margin will fall within 10 basis points compared with the end of the fourth quarter of last year, Xu Yiming, the bank’s chief financial officer, told a news briefing.

Xu said he expected the bank’s loan pricing to improve slightly in 2017.

The lender’s debt-to-equity swaps program was set to exceed 300 billion yuan ($43.54 billion) by the end of the first quarter, bank president Wang Zuji also told reporters.

CCB on Wednesday reported a slightly higher fourth-quarter and full-year net profit, amid a squeeze on bank margins.

The bank’s net interest margin - the difference between interest paid and earned - narrowed to 2.2 percent at end-December, from 2.63 percent a year earlier.

CCB’s non-performing loan (NPL) ratio eased to 1.52 percent at end-2016 from 1.56 percent at end-September.

The transfer of NPLs from CCB’s balance sheet - which amounted to 38.15 billion yuan last year - are expected to be “much smaller” this year, said Peng Hongming, head of the bank’s risk management department.

Separately, CCB president Wang said on the sidelines of the briefing that the bank had no loan or other credit exposure to troubled China Huishan Dairy Holdings Co Ltd. ($1 = 6.8895 Chinese yuan renminbi) (Reporting by Shu Zhang and Matthew Miller; Additional reporting by Beijing Monitoring Desk; Editing by Clarence Fernandez and Christopher Cushing)

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