3 of China’s big banks post profit surge
Print Edition
Three of China’s largest lenders have booked a jump in fourth-quarter net profit of well over 40 percent, the first green shoots since the COVID-19 pandemic battered borrowers last year.
Net interest margins remained stable for all three, as analysts predict a positive turn in the key gauge of profitability for them this year.
During the first three quarters of 2020, Chinese lenders made hefty loan-loss provisions as the government urged the sector to step up lending to pandemic-hit sectors, but many have begun to see improvements in earnings in tandem with an economic recovery and are expected to continue to do so throughout the year.
“Banks’ average net interest margin is unlikely to narrow further from the 2020 level of 2.1 percent because of the central bank’s gradual return to a neutral monetary policy stance,” Moody’s said in a March China Banking outlook.
Industrial and Commercial Bank of China and Bank of Communications reported a jump in fourth-quarter net profit on Friday of well over 40 percent. Meanwhile, China Construction Bank logged a 58-percent surge in net profit in the same quarter.
It was the first profit gain in three quarters for all three lenders.
For ICBC, profit for the full year increased by 1.2 percent to 315.9 billion yuan (US$48.3 billion), while at BoCom, it climbed 1.3 percent to 78.3 billion yuan. CCB’s profit over the same period increased by 1.6 percent to 271.1 billion yuan. All three lenders surpassed Refinitive estimates.
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