BEA profit grows 9.2pc to record HK$6.6b

Bank of East Asia has posted a record net profit for a fourth year - rising 9.2 per cent to HK$6.6 billion - thanks to higher interest income and an improvement in bad loans in the second half of last year, beating analysts' expectations of a slight fall.

At a post-results press conference yesterday, David Li Kwok-po, the chairman and chief executive of the largest family-controlled lender in Hong Kong, brushed aside talk of a sale, saying he would only consider selling the lender if "someone offers a price-book ratio of three to four times".

After the acquisition of Chong Hing Bank by Guangzhou government-backed Yue Xiu last year - at a price-book ratio of 2.08 times - only three family-controlled banks are left in the city, with Wing Hang Bank, the second-largest, engaged in talks with Singapore's Oversea-Chinese Banking Corp about a sale.

Dominic Chan, an analyst at BNP Paribas, said last month that he expected it to take a price of 2.3 to 2.4 times book value to get that deal done.

Li said increased regulatory restrictions on the running of banks led to the declining number of family-controlled lenders, which were also finding it hard to compete with the local branches of mainland banks.

BEA's improved asset quality and better cost control have seen its shares surge in the past month. They closed up 2.96 per cent at HK$31.35 yesterday after jumping as much as 5.4 per cent.

Analysts expect another good year for BEA this year.