China Merchants Q1 profit up 40% at $864mln

Lender said higher net interest margin and expanded intermediary business boosted its net profit.

China Merchants Bank Corp.'s first-quarter net profit soared 40% from the same period last year after net interest income and fee-based revenue rose sharply.

The strong result is in stark contrast to the 33% drop in the bank's first-quarter net profit last year, underscoring how Chinese firms have regained their growth momentum, buoyed by the domestic economic recovery.

China Merchants Bank, the country's sixth-largest lender by assets, said its net profit for the three months ended March 31 was 5.9 billion yuan (US$864.4 million), up from 4.2 billion yuan (S 615.2 million) a year earlier.

Also Wednesday, China Citic Bank Corp, the country's eighth-largest lender by assets, reported a 28% increase in first-quarter net profit to 4.31 billion yuan. ($631.32 million).

Last year was a difficult one for China's medium-sized banks, as their net interest margins narrowed more than those of larger banks, which benefited from a government-led credit boom. Also, export-focused private companies, the midsize banks' major clients, were hit by the global recession.

View the full story in the Wall Street Journal.