ICBC, AgBank see profits rebound
Print Edition
TWO of China’s big state-owned banks said yesterday their profits rebounded in 2017 after a pair of moribund years thanks to an accelerating domestic economy, and analysts expect further gains as a government credit clampdown favors big lenders.
The Industrial and Commercial Bank of China, the world’s biggest lender by total assets, said full-year profit grew 2.8 percent to 286.05 billion yuan (US$45 billion).
The Agricultural Bank of China said its net income rose 4.9 percent to 182.97 billion yuan.
Their earnings were reported in filings to the Hong Kong stock exchange, where both have shares listed.
The remaining half of the “Big Four” Chinese banks — Bank of China and China Construction Bank — are set to also release positive earnings news later in the week.
China’s economy grew a forecast-beating 6.9 percent in 2017, picking up steam for the first time since 2010.
Analysts said the big banks also are benefiting from the Chinese government’s campaign to clean up bad loans and risky lending in its often chaotic and murky financial system.
The crackdown is seen as hitting smaller lenders and wealth management companies hardest, driving them to seek loans from the established banks in order to clean up their balance sheets.
China’s banking regulator is also believed to have recently lowered bad-loan provisions for banks, according to a Bloomberg News report, which frees up more cash for lending.
“China’s banks have shaken off the doldrums,” Richard Cao, a Shenzhen-based analyst at Guotai Junan Securities Co, was quoted by Bloomberg News as saying.
“Their earnings growth will accelerate for the next two to three years.”
The big banks’ profit growth was largely flat in the preceding two years as concerns grew over rising bad loans.
But both ICBC and AgBank reported lower non-performing loans for 2017.
ICBC’s ratio of NPLs shrank to 1.55 percent as of end-December 2017, from 1.62 percent the previous year.
AgBank’s ratio fell to 1.81 over the same period, from 2.37 a year earlier.
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