3 Chinese banks suffer weak profit growth in H1
Print Edition
THREE of China’s top-five lenders yesterday reported weak growth in net profit and soaring bad loans in their semi-annual earnings reports amid a downturn in the Chinese economy.
The Industrial and Commercial Bank of China, the world’s biggest lender by assets, saw net profit little changed at 149 billion yuan (US$23.3 billion) in the first half of this year against 148 billion yuan a year ago, according to ICBC’s filing to the Hong Kong stock exchange yesterday. Its net earnings hit 74.7 billion yuan in the quarter ended on June 30, in line with 74.8 billion yuan a year earlier.
ICBC reported a 31 percent rise in bad loans in the first six months of this year, sending the bad loan ratio up 0.27 percentage points to 1.4 percent.
Non-performing loans rose to 163.5 billion yuan by June, the bank said. The increase was at more than twice the pace in the same period in 2014, as ICBC blamed a weak performance in China’s western region, the Yangtze River Delta and the Bohai Rim.
The Agriculture Bank of China, one of the biggest state-owned lenders, said net profit by June was flat at 104.3 billion yuan. Net interest income, which is the biggest profit contributor for most Chinese banks, added 4.8 percent to 219.5 billion yuan. Net non-interest income shed 0.4 percent to 47 billion yuan.
The bad loan ratio of AgBank jumped to 1.83 percent in June from 1.53 percent at the end of March as the lender cited poor solvency of manufacturing and retailing companies in the western region.
The Bank of Communications, China’s fifth-largest lender, said net profit gained 1.5 percent to 37.3 billion yuan. Net interest income jumped 23.5 percent to 19.4 billion yuan.
BoCom reported bad loans of 50.2 billion yuan by June, up 7.1 billion yuan from the end of the first quarter, sending the bad loan ratio to 1.35 percent.
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