...August 28, 2023 SINGAPORE (S&P Global Ratings) Aug. 29, 2023--China Bohai Bank remains financially under pressure from its exposure to weaker regions in north and northeast China. Recent results for the first half of 2023 indicate this. - Pretax profit was down 7% year on year, with the numbers for north and northeast China down 51%. The region's impairment losses accounted for 92% of the bank's total in the first half of 2023. - China Bohai Bank (###-/Negative/A-3) had a combined ratio for Stage 2 and Stage 3 loans of 6.04% at end-June 2023, versus 5.70% at end-2022. This was 136 basis points (bps) higher than the bank's combined ratio for nonperforming and special-mention loans. The wide and growing gap increases the risk of more Stage 2 loans becoming nonperforming over the next few years. - Pressure on net interest margins (down 34 bps year on year), weak loan growth (down 23 bps year to date) and higher operating expenses (up 11% year on year) contributed to a low annualized return...
