According to news from Fortune News on June 14, due to the issuance of a profit warning, the net profit in the first half of the year is expected to decline significantly.Bank of East Asia (00023.HK) $After opening 4% lower, the share price fell all the way to HK $22.20, down 8.07%. The share price reached its lowest level since early February 2016, with a turnover of HK $52.3383 million:

It is reported that the Bank of East Asia announced yesterday that it expected its profit to fall significantly in the first half of 2019 compared with the same period last year, while the profit attributable to shareholders in the first half of 2018 was HK $3.992 billion. The decline in net profit was mainly due to the downgrading of four previously approved loan assets worth HK $6.2 billion, resulting in significant after-tax impairment losses of about HK $2.5 billion to HK $3 billion.

Li Minqiao and Li Minbin, joint chief executives (designate), said in a conference call yesterday that the credit environment in the mainland had faced greater pressure in the past 18 months, resulting in financial pressure on four mainland commercial real estate and private enterprise customers in East Asia. the bank then decided to speed up the recognition and treatment of non-performing loans, actively manage asset quality, and list loans less than 90 days overdue as non-performing loans in advance, and make appropriate provisions. However, it has not been disclosed whether the mainland business will incur losses in the medium term. He expects the bank's impairment provision to fall sharply in the second half of the year compared with the first half, improve business performance and return to more normal conditions.

Li Minqiao said that although this provision has a significant impact on medium-term results, it will still make a net profit in the medium term; the capital position remains robust, with common equity tier one capital and total capital adequacy ratios expected to be higher than 14.5% and 19% respectively by the end of June, far exceeding regulatory requirements; and liquidity continues to be strong. The bank's core banking business remains strong and its operating profit before provision is expected to grow healthily. He is confident that the Group's interim results will remain profitable and its dividend policy will remain unchanged.

Li Minbin pointed out that the loan amount of private enterprises in the mainland and not the top 50 real estate developers accounts for about 2% of the total loan amount of the group, which is mainly concentrated in the third-tier cities in the mainland, but the region is not disclosed, and this advance impairment provision is an one-off event. I am confident that the mainland business provision in the second half of the year will be much lower than that in the first half. He added that he has confidence in China's long-term economy and will continue to optimize the loan structure, strictly control the development of enterprise business, and expand retail business at the same time.

In its latest research report, CICC has lowered its target price in East Asia from 25.26 yuan to 21.70 yuan, and its investment rating has been downgraded from "hold" to "sell".