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BOC HONG KONG 1Q Operating Profit before Impairment Allowances at $6.643B

 BOC HONG KONG (02388.HK)  +0.350 (+1.446%)    Short selling $30.30M; Ratio 18.599%   announced that net operating income before impairment allowances of the group’s decreased by 4.1% year-on-year to $9.49 billion for the first quarter of 2016. Operating profit before impairment allowances was $6.643 billion, down 8.1% yearly. 

Net interest income dropped due to the narrowing of net interest margin but was partially offset by the growth in average interest-earning assets. The decline in net interest margin was mainly due to the decrease in average interest spread, caused by the drop in onshore RMB market interest rates and the decrease in higher-yielding RMB balances and placements with banks, as well as the increase in short-term debt securities investments.

The bank said the growth momentum of the Hong Kong economy slowed with weakness in private consumption and downward pressures on asset prices. Market interest rates continued at low levels, and the RMB market experienced volatility in the first two months of the year and only gradually restored stability in March, the overall operating environment of the banking industry remained highly challenging.

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