ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Stocks

Share price rebounds despite lower profit

HONG KONG -- Bank of East Asia ended higher for the first time in three days on Monday, buoyed by the overall market updraft stemming from gains in U.S. and European bourses at the end of last week.

     The major Hong Kong lender rose 2.44% to 23.10 Hong Kong dollars ($2.97), up HK$0.55 from Friday's closing price. During the Monday lunch hour here, the bank announced a drop in net profit for the year ended in December that was in line with market expectations.

     U.S. hedge fund Elliot Management had advised the lender to put itself up for sale, but the family-owned bank, in which Japan's Sumitomo Mitsui Banking Corp. holds a roughly 17% stake, rejected that advice on Monday. BEA's stock price rebound Monday was seen by some as a sign that investors supported the bank's decision.

     BEA's net profit for the year through December fell 17% to HK$5.52 billion. Net interest income declined 6% to HK$11.93 billion, while noninterest income dipped 1% to HK$4.09 billion. The bank's Chinese operations have been hit by higher costs and shrinking interest rate margins, following rate cuts by the People's Bank of China. As the business environment is not expected to improve anytime soon, holding down costs will be its top priority, BEA noted.

     In a letter published Feb. 4, Elliot urged BEA's management to consider putting the bank up for sale at HK$60 per share. "Given the current challenging macroeconomic and operating environment, as well as the business initiatives that are underway, now is a poor time to contemplate a sale," the bank said in a statement Monday. It went on to say that the best way to benefit shareholders will be to develop and improve the business.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media