BEIJING/SINGAPORE, April 29 (Reuters) - China Construction Bank Ltd (CCB), the country’s second-largest lender by assets, posted a lower than expected 4.2 percent increase in first-quarter profit as its interest margin shrank.
CCB said net profit was 76.92 billion yuan ($11.43 billion) for the January-March period, versus 73.82 billion yuan a year earlier. The results were, however, below a forecast by three analysts, who on average expected profit growth of 5.0 percent for the quarter, according to data compiled by Reuters.
The results show how a slowing economy and government-directed lending push to spur growth continues to weigh on profitability at larger banks.
CCB’s non-performing loan (NPL) ratio was 1.46 at the end of March, unchanged from three months earlier.
The bank’s net interest margin (NIM), a key measure of profitability, narrowed to 2.29 percent at the end of March, versus 2.31 percent at the end of 2018.
CCB’s mainland shares rose 2 percent on Monday ahead of the results announcement. They have gained about 19 percent in 2019, compared with around a 31 percent rise in the blue-chip CSI300 index, giving the bank a market value of 1.6 trillion yuan, Refinitiv data showed. ($1 = 6.7312 Chinese yuan renminbi) (Reporting by Cheng Leng in BEIJING and Shu Zhang in SINGAPORE; Editing by Himani Sarkar and Kirsten Donovan)