AgBank and BOC see slow rise in net
By Hu Xiaocen |
March 27, 2013, Wednesday
|
Print Edition
Print Edition
THE Agricultural Bank of China and the Bank of China both reported a slower increase in net profit in 2012 amid an economic slowdown.
AgBank's net earning grew to 145.1 billion yuan (US$23.1 billion) last year, up 19 percent from 121.9 billion yuan in 2011, according to China's third biggest lender's annual report unveiled yesterday.
Its net interest margin narrowed to 2.67 percent from 2.73 percent a year earlier. Its bad loan ratio improved to 1.33 percent from 1.55 percent.
"AgBank has the highest proportion of personal deposits and current deposits, which grants it the lowest deposit cost among the top four banks,'' said BOC International, the investment banking unit of BOC, in the report.
Net profit at BOC, China's biggest foreign exchange lender, rose 12 percent to 139.4 billion yuan last year from 124.3 billion yuan in 2011. Net interest margin improved from 2.12 percent to 2.15 percent, while its bad loan ratio declined 0.05 percentage point to 0.95 percent.
''BOC has the lowest net interest margin among the top four lenders due to weak returns from its foreign currency loans,'' BOC International's report said.
BOC said volatile global financial markets and low interest rate polices at central banks in other countries hurt returns in its foreign currency business.
Growth has also been dented by the government's moderation of interest rate controls. Chinese banks have in the past benefited from a margin between lending and deposit rates of more than 3 percentage points, among the world's largest.
The central bank in June cut the minimum rate banks are allowed to charge commercial borrowers to 0.8 times the government's benchmark rate from the previous level of 0.9 percent. It also said banks would be allowed for the first time to pay depositors up to 1.1 times the rate set by the government.
AgBank's net earning grew to 145.1 billion yuan (US$23.1 billion) last year, up 19 percent from 121.9 billion yuan in 2011, according to China's third biggest lender's annual report unveiled yesterday.
Its net interest margin narrowed to 2.67 percent from 2.73 percent a year earlier. Its bad loan ratio improved to 1.33 percent from 1.55 percent.
"AgBank has the highest proportion of personal deposits and current deposits, which grants it the lowest deposit cost among the top four banks,'' said BOC International, the investment banking unit of BOC, in the report.
Net profit at BOC, China's biggest foreign exchange lender, rose 12 percent to 139.4 billion yuan last year from 124.3 billion yuan in 2011. Net interest margin improved from 2.12 percent to 2.15 percent, while its bad loan ratio declined 0.05 percentage point to 0.95 percent.
''BOC has the lowest net interest margin among the top four lenders due to weak returns from its foreign currency loans,'' BOC International's report said.
BOC said volatile global financial markets and low interest rate polices at central banks in other countries hurt returns in its foreign currency business.
Growth has also been dented by the government's moderation of interest rate controls. Chinese banks have in the past benefited from a margin between lending and deposit rates of more than 3 percentage points, among the world's largest.
The central bank in June cut the minimum rate banks are allowed to charge commercial borrowers to 0.8 times the government's benchmark rate from the previous level of 0.9 percent. It also said banks would be allowed for the first time to pay depositors up to 1.1 times the rate set by the government.
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