China CITIC Bank's NIM dipped to 2.37% on heavy price competition

NIM pressure lingers despite measures.

According to Maybank Kim Eng, as CNCB has heavy exposure to corporate deposits (81% of total deposits in Dec 2013), it is more vulnerable to price competition on deposits. As such, its NIM narrowed by 22bps QoQ to 2.37% in 1Q14. CNCB has shifted towards higher-yield reverse REPO and asset management schemes to minimize the NIM pressure during 1Q14.

Here's more:

Overall, we lower our NIM forecasts from 2.54-2.57% to 2.31-2.35% for 2014-15.

Room to improve net fees growth. CNCB has maintained strong growth momentum in net fees of 71.4% YoY in 1Q14. We believe this could be related to its niche at bond underwriting, guarantee and consultancy fees. CNCB indicated that it will co-operate with Alipay and Tenpay to issue virtual credit cards.

If CNCB is able to double its credit cards issued under this platform within 3 years, we estimate this will enhance its net fees by CNY2b by 2016. In view of CNCB’s gradual expansion in branch outlets, we raise our net fees CAGR forecast from 18.7% to 35.6% during 2013-16.

Also Read

ING names Uday Sareen as APAC chief exec and head of wholesale banking

Banks must expand net zero targets, set clearer O&G goals: org

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit