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China Construction Bank posts 1.45 percent annual profit growth

CHINA Construction bank, the country's second largest lender by assets, posted 1.45 percent of profit growth in 2016.

The increase, compared with a nearly flat condition a year earlier, was based on better loan business and a nearly 12-percent cut on operational cost, according to the bank's annual report filed to both Shanghai and Hong Kong stock exchanges.

Full year net profit of CCB reached 232.4 billion yuan (US$33.7 billion) by the end of December, compared with 228.2 billion yuan a year earlier.

Non-performing loan ratio of CCB decreased to 1.52 percent from 1.58 percent, while bad-loan coverage ratio, or ratio of provisions that banks must set aside for bad loans, was just above the regulatory minimum of 150 percent, according to the report.

Total assets of CCB rose to 20.97 trillion yuan by the end of 2016, up 14.25 percent year on year.

Chinese lenders have been struggling with rising defaults and narrowing margin amid economic adjustment, as well as the government's clampdown on overheated mortgage lending and shadow banking business last year. However results released this week underlined that the condition has been stabilized among big lenders.

Agriculture Bank of China, the country’s third largest bank, reported surprisingly 1.86 percent increase on annual net profit in 2016, with bad loan ratio fell slightly to 2.37 percent by 2016 from previous year's 2.39 percent.

Ping'an Securities Co analyst Li Yamin noted that CCB's asset quality will be kept improving, and its performance will be benefited from growing loans on infrastructure projects in 2017. Other analysts added that tighter liquidity conditions will also help bigger banks to get more cash on net interest margin.

China’s big five banks are all reporting full-year earnings this week. Industrial and Commercial Bank of China, the country’s largest lender, will report today after the conclusion of stock trading, while the Bank of China's results are scheduled for Friday.


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