China's BoCom Q4 profit up 25pct, beats forecast

Bank of Communications (BoCom), posted a forecast-beating 25 per cent rise in fourth-quarter profit as rapid loan expansion last year prompted China's fifth-largest lender to seek fresh capital and set aside more provisions for bad loans. BoCom, about one-fifth owned by HSBC Holdings Plc, earned 7.25bn yuan ($1.06bn) in the final three months of 2009, compared with a restated net profit of 5.8bn yuan a year earlier, according to Reuters calculations based on BoCom's annual results. The results beat expectations of 22 analysts polled by Thomson Reuters I/B/E/S, who had expected a quarterly profit of 6bn yuan. Chinese lenders benefited from a government-directed lending spree last year, but at the cost of shrinking margins, weaker balance sheets and heightened risk of defaults. BoCom last month unveiled a rights issue plan to raise as much as 42bn yuan ($6.15bn) in Shanghai and Hong Kong, joining rivals including Bank of China and China Merchants Bank in a rush to raise cash. For the full year, BoCom posted a 5.6 per cent rise in net profit to 30.12bn yuan.