The third largest Chinese bank by assets posted a net profit of CNY109.2 billion (US$16 billion) in the first half year, down 10.8% from a year earlier.
It retained the second position in the country’s structured products issuer rankings with a 47% increase in market share in H1 20 (28%) compared to the previous quarter (19%).
Agricultural Bank of China has reported that net interest income grew by 8.9% to CNY258.9 billion, and net fee and commission income rose by 2.9% to CNY52.4 billion mainly driven by a 9.5% increase of bank card fees and a 6.9% increase of consultancy and advisory fees year-on-year (YoY).
Meanwhile, net trading gains were down 39.6% to CNY7.4 billion, mainly on foreign exchange and interest rates derivatives, while financial investments reported a net loss of CNY3.8 billion from a net gain of CNY1.1 billion, which pushed non-interest income down 20.6% to CNY28.5 billion YoY.
The three income sources amounted to an operating income of CNY339.8 billion while operating expenses were up 2.9% to CNY108 billion.
As part of the financial investments loss, the amount paid upon the maturity of structured deposits was CNY5.6 billion, which was not applicable a year earlier. Underlying assets and liabilities related to principal-guaranteed wealth management products (WMP) registered a loss of CNY592m from a net gain of CNY415m.
For the wealth management division, the balance of WMP (excluding structured deposits) amounted to CNY1.8 trillion as at 30 June, among which the net-worth, principal guaranteed with expected return, non-principal guaranteed with expected return stood at CNY682 billion, CNY277 billion and CNY836.8 billion, making up 38%, 15.4% and 46.6%, respectively.
On-balance sheet, derivatives assets were down 18.1% CNY20.4 billion while derivative liabilities were up 11.3% to CNY32.9 billion.
Agricultural Bank of China remains among the top structured products issuer in China and has strengthened its position as the second provider in the Chinese market by market share since the second half of 2019, SRP data shows.
The bank has seen its issuance (198 products in H1 19 v 771 in H1 20) and sales (US$3.4 in H1 19 v US$12.4 billion in H1 20) going up by 289% and 264%, respectively. ABC’s issuance and sales are also up by 67% and 72%, respectively, compared to the previous six months (H2 19: 460 products/US$7.2 billion).
Year to date, it has issued 771 structures worth US$12.4 billion, which translates into a market share of 28.2% only improved by China Merchants Bank’s 34% market share. By underlying, 854 products of the issuance are linked to the performance of EUR/USD while the remaining are tied to the performance of gold. They all are deployed with range as payoff with a common tenor of less than a year.
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