Neither the covid crisis did not harm Bank of China´s business nor its financial results. Even the investors appreciate such a development. The market capitalization of Bank of China is growing since the middle of 2022. But the recent development may cause forehead wrinkles to some investors.

Bank of China is the bank with the longest continuous operation among Chinese banks. Formally it was established in February 1912, Bank of China served consecutively as the country’s central bank, international exchange bank and specialised international trade bank. After 1949, drawing on its long history as the state-designated specialised foreign exchange and trade bank, Bank of China became responsible for managing China’s foreign exchange operations and offering international trade settlement, overseas fund transfer and other non-trade foreign exchange services.

Since 1994 Bank of China operates as fully state-owned commercial bank. It provides various financial services, and has developed into a large commercial bank delivering services in local and foreign currencies and featuring complete business varieties.

In 2006 Bank of China stepped on the Hong Kong Stock Exchange and the Shanghai Stock Exchange. It was the first Chinese bank to launch an initial public offering. Five years later, Bank of China became the first financial institution from an emerging market economy to be designated as a Global Systemically Important Bank.

Bank of China recorded a relatively successful five-year period (2019 – 2023) of constant growth of operating income (by one fifth), operating profit (by almost 18 %), and net profit (by 22 %). But since the beginning of 2024 Bank of China experienced a bit of stagnation in comparison to the previous year.

During the first six months of 2024 Bank of China operating income fell by 0.6 % (year-on-year) to nearly 318 bn RMB, but it was still around 8 % above the 2022 level. On the other hand, operating profit recorded a slight fell in comparison to the end of June 2023 and to the end of June 2022 as well. Net profit for the first six months of 2024 decreased by 1 % (year-on-year) to 126,5 bn RMB. Anyway, it was nearly 2.5 % higher than in the same period of 2022.

Bank of China stocks were relatively stable during the covid crisis. Between the end of 2019 and the and of 2022 Bank of China market capitalization decreased by only around 17 %. Since the middle of 2022 the bank´s stocks recorded more or less constant growth. Since the middle of July 2022 the market capitalization of Bank of Chine grew by 62 %. The stocks are now being traded at the highest level since the middle of 2015.

Bank of China stock price development (10year chart)

Oleh Shalenyk, Financial analyst of Alpho