Agricultural Bank of China's nine-month net profit rises 7%

Overview

• Chinese lender's January-September operating income rose 12.5% yr/yr

• Net profit attributable to equity holders rose 7.1% yr/yr

• Company to raise up to RMB160 bln via A-share issuance to boost CET1 capital

Outlook

• Agricultural Bank of China did not provide specific guidance for future quarters or the full year in its press release

Result Drivers

• NET INTEREST INCOME – Nine-month net interest income rose 10.6% as interest income increased and interest expense declined

• FEE-INCOME HEADWIND – Net fee and commission income fell 10.4%, primarily due to a high base from one-off wealth-management gains a year earlier

• OPERATING CASH FLOW – Net cash from operating activities fell 60.2% as net increases in customer and interbank deposits decreased

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 11 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for AGRICULTURAL BANK OF CHINA LIMITED is HK$7.35, about 7.3% above its October 29 closing price of HK$6.85

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 5 three months ago

Reuters Recommended Reads

• Oct 28 - China's Bank of Zhengzhou 9M net profit rises on higher net interest income

• Oct 28 - China's Bank of Qingdao nine-month net profit rises 15.7%

• Oct 29 - UK's Lloyds Q3 profit nearly doubles on lending growth

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)