CITIC Limited Half-Year Report 2019

10 Half-Year Report 2019 CITIC Limited Net profit attributable to ordinary shareholders 25,515 24,256 2,093 1,279 3,514 2,406 703 704 3,540 4,747 1,093 2,498 Others Real estate Financial services Resources and energy Manufacturing Engineering contracting HK$ million 1H 2019 1H 2018 Financial services: In the first half of 2019, the financial services segment recorded a net profit attributable to ordinary shareholders of HK$25,515 million, representing a year-on-year increase of HK$1,259 million, or 5.2%. Excluding the effect of currency translation, the net profit attributable to ordinary shareholders would have increased by 12% year-on-year. As CITIC Bank continued to strengthen its corporate business and expand its retail banking business, deposits and loans increased by 11% and 6.3%, respectively, as compared with the beginning of the year. The net interest margin rose by 7 basis points to 1.96% year-on-year, which contributed to an increase in net interest income and non-interest income of 15% and 14%, respectively. Asset quality remained stable, with the non-performing loan ratio decreasing by 0.05 percentage point to 1.72% and the allowance coverage ratio increasing by 7 percentage points to 165% as compared with the beginning of the year. As a result, net profit attributable to the bank’s shareholders recorded a year-on-year increase of 10%. Driven by the securities investment business, CITIC Securities achieved a year-on-year increase of 16% in net profit, and most of its businesses, including investment banking, fixed income and asset management, maintained their leading market position. CITIC Trust continued its business transformation with an increase in the proportion of the active management business and a rise in revenue from the proprietary business, which contributed to a 35% year-on-year increase in net profit. Our insurance business recorded an increase of 55% in premium income as a result of higher sales of savings products, while net profit was basically the same as the corresponding period last year due to a provision made on an investment. Resources and energy: In the first half of 2019, the resources and energy segment recorded a net profit attributable to ordinary shareholders of HK$2,093 million, representing a year-on-year increase of HK$814 million, or 64%. Due to the significant increase in iron ore prices and strict cost control measures, the Sino Iron Project recorded a profit for the first time since the commencement of production and was the principal contributor to the profit growth of the resources and energy segment. Net profit of CITIC Metal Group decreased by 24% year-on-year, mainly due to the decline in deliveries caused by road blockage of the Las Bambas copper mine (in which CITIC Metal Group holds a 15% interest) in Peru. This resulted in a decrease of HK$181 million in the share of net profit. The trading business recorded an increase in profit due to higher sales volumes and prices of niobium and iron ore. Owing to the drop in crude oil prices and a decrease in sales volume, the profit of the crude oil business decreased by 20%. The aluminium smelting business turned from profit to loss due to falling prices.