Increase in bank profits much slower
Source: Xinhua |
October 4, 2012, Thursday
|
Print Edition
Print Edition
CHINA'S top 10 listed banks saw sharply slowing net profits in the first half of the year as bad loans increased, a recent report by PwC showed.
The top 10 listed banks reported 513.2 billion yuan (US$81.5 billion) of net profits during the first half, up 17 percent year on year. But the growth rate dropped from the 34 percent growth in the same period of last year.
The report attributed the slowing profit growth to the central bank cutting interest rates twice this year, coupled with widening the interest rate bandwidth for loans and deposits.
A new rule by the People's Bank of China, the central bank, allows financial institutions to set the maximum for deposits' interest rates at 1.1 times the benchmark, with the minimum for loans' interest rates at 70 percent of the benchmark. The report also said financial authorities' stringent review of banks' service charges and innovative treasury products helped cause the slowing growth of profits.
The top 10 banks include state-owned commercial banks such as the Industrial and Commercial Bank of China and joint-stock commercial banks, including the China Merchants Bank and the China CITIC Bank.
The 10 banks' total assets reached 76 trillion yuan as of the end of June, up 10.68 percent from the end of last year.
The top 10 listed banks reported 513.2 billion yuan (US$81.5 billion) of net profits during the first half, up 17 percent year on year. But the growth rate dropped from the 34 percent growth in the same period of last year.
The report attributed the slowing profit growth to the central bank cutting interest rates twice this year, coupled with widening the interest rate bandwidth for loans and deposits.
A new rule by the People's Bank of China, the central bank, allows financial institutions to set the maximum for deposits' interest rates at 1.1 times the benchmark, with the minimum for loans' interest rates at 70 percent of the benchmark. The report also said financial authorities' stringent review of banks' service charges and innovative treasury products helped cause the slowing growth of profits.
The top 10 banks include state-owned commercial banks such as the Industrial and Commercial Bank of China and joint-stock commercial banks, including the China Merchants Bank and the China CITIC Bank.
The 10 banks' total assets reached 76 trillion yuan as of the end of June, up 10.68 percent from the end of last year.
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