China Citic Bank Corp. (998) shares fell the most in more than 10 months in Hong Kong trading after 2012 earnings missed analyst estimates, as the market reopened after a two-day holiday break.
Citic Bank fell as much as 6.9 percent, the biggest intraday drop since May, and traded at HK$4.35, a loss of 6.7 percent, at 1:35 p.m. The benchmark Hang Seng Index lost 0.1 percent. Citic posted 2012 net income of 31 billion yuan ($5 billion) on March 28 after the market closed, missing the 33.5 billion-yuan average estimate in a Bloomberg survey of analysts.
A “massive” 6.35 billion-yuan provision charge in the fourth quarter pushed earnings below the estimate, Sheng Nan, a Hong Kong-based analyst at CCB International Holdings Ltd., said in a note today. The shares fell in Shanghai yesterday and on March 29, when Hong Kong’s market was closed.
“The uncertain asset-quality outlook remains a major concern,” Sheng said. Formation of non-performing loans “may continue to take place at an accelerating pace leading to elevated credit costs for the near term.”
Mirae Asset Securities HK Ltd. analyst Stanley Li downgraded Citic Bank to the equivalent of sell from hold after the earnings.
Citic led declines among Chinese bank shares on March 28, falling in Shanghai by as much as the daily limit of 10 percent after the China Banking Regulatory Commission said it would tighten rules on lenders’ wealth-management products business.
The regulator told banks to limit investments of client funds in credit assets that aren’t publicly traded, and to isolate the risks from their operations.
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