CRCB 1Q15 earnings jump 10.6% YoY to RMB2.0b

Thanks to solid fee income growth.

CRCB’s 1Q15 earnings were up 10.6% YoY to RMB2.0b, equivalent to 28.3% of CCB International's full-year forecast, which is higher than CCB International's estimate.

According to a research note from CCB International, PPOP growth was a strong 17.4%, driven by impressive
asset growth of 16% and robust fee income of 101% YoY from WMP (157% YoY) and bank card (91%) services.

Credit cost was up 17bp YoY to 68bp in 1Q15. Asset quality still paints a better picture than peers as the NPL ratio at CRCB declined 4bp QoQ. CCB International estimates the new NPL formation ratio is 22bp.

Here's more from CCB International:

Strength in deposits and NIM to sustain. The bank maintained a record of resilient deposit growth, NIM and asset quality.

Deposit growth was 9.3% QoQ, much higher than peers. NIM for 1Q15 was down 11bp YoY to 3.28%, but still the highest among the H-share China banks.

We attribute this to CRCB’s funding advantage in the rural areas of Chongqing. We expect its strength in deposits and NIM to sustain.

Pullback in interbank business likely. Total outstanding reverse repo assets and receivables investment was largely unchanged QoQ.

However, the placement from banks fell 56% QoQ. We expect a reduction in interbank borrowing to result in a pullback in interbank business.