Bank of China Shares Rally on Strong H1 Profit and Margin Growth

Shares of Bank of China (3988.HK) rallied 5.3% in Hong Kong trading on Monday, closing at HK$5.875 after the lender released a strong set of first-half 2026 results over the weekend. The bank's performance stood in sharp contrast to the broader market, with the Hang Seng index declining 0.9% during the same session.

Upbeat Earnings Report

According to its interim report, Bank of China's operating revenue for the first six months of 2026 rose 8.4% year-over-year to RMB 357.1 billion. Net profit attributable to shareholders saw a 5.1% increase to RMB 123.6 billion, which the report noted was the highest profit growth rate among China’s six major state-owned banks for the period.

Investor sentiment was further bolstered by the announcement of an interim cash dividend, adding to the stock's appeal.

Margin and Asset Quality Improve

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A key highlight for investors and analysts was the apparent easing of pressure on the bank's profitability. The bank’s net interest margin (NIM) edged up by 1 basis point to 1.27%, a significant development suggesting it is navigating China's low-interest-rate environment effectively. This was supported by a 10.2% year-over-year surge in net interest income.

Bank of China also demonstrated improved asset quality. The non-performing loan (NPL) ratio declined to 1.22%, while its provision coverage ratio—a measure of its capacity to absorb potential losses—strengthened to 200.85%.

Analyst View

Following the results, analysts at Huatai Securities reaffirmed their "buy" ratings on the bank's shares, according to Investing.com. The brokerage cited the stabilization in net interest margin, accelerating net interest income, and healthier corporate and overseas loan books as primary drivers for its positive outlook.