Chinese banks challenged with rising bad loans, slower profit growth

Sixteen listed Chinese banks reported non-performing loans totalling 604.65 billion yuan (98.38 billion U.S. dollars) as of the end of September this year, up 31.7 percent from a year ago, data from the banks' quarterly-business reports showed.

The non-performing loan ratios for the nation's five biggest banks, including the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China, Bank of China, China Construction Bank, and the Bank of Communications (BOCOM) stood at 1.06 percent, 1.29 percent, 1.07 percent, 1.13 percent, and 1.17 percent, respectively.

The BOCOM said in a report that its bad loans mainly stemmed from the eastern regions and were a result of the slowing economy, as deepening economic restructuring had pushed up bad-loan risks.

The bank forecast that its bad loans may still grow, albeit moderately. It dismissed worries that its bad loans may spiral out of control.

Meanwhile, the combined net profits of the 16 banks reached more than 1 trillion yuan in the first three quarters, up 9.7 percent year on year. The figure has slowed sharply compared to the double-digit growth rates of recent years.

Smaller banks fared relatively better than the big banks during the period, with Pingan Bank seeing its net profit surge 34.18 percent year on year, compared to the 7.26 percent profit growth rate of the ICBC, the nation's largest lender.