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August 27, 2016

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Banks profit even as NPL ratios rise

CHINA Construction Bank Corp and Bank of Communications Co reported slight gains in net profits and bad-loan ratios in their half-year reports.

CCB’s net earnings rose 1.1 percent to 133.41 billion yuan (US$20 billion) from a year earlier, while BoCom said its net profit added 0.9 percent to 37.7 billion yuan, according to their half-year earnings reports filed late Thursday to the Shanghai Stock Exchange.

CCB’s bad loan ratio in the first six months widened to 1.63 percent from 1.58 percent at the end of June last year as the bank’s bad loans jumped 9.6 percent to 181.95 billion yuan.

BoCom’s non-performing loan ratio rose to 1.54 percent at the end of June from 1.51 percent at the end of last year as its NPLs grew 9.2 percent to 61.36 billion yuan.

The two banks also managed to keep their bad-debt buffers above a regulatory minimum of 150 percent of current sour credit in the second quarter.

While bad-debt risks are “controllable,” the situation remains severe, BoCom President Peng Chun said at a briefing in Shanghai yesterday.


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