Profit growth slows for Chinese banks in H1  

五家银行净利增速降至个位

16家上市银行今年的中期业绩已经全部披露，其中交通银行、光大银行、工商银行、中信银行和建设银行净利润增幅均呈个位数，而去年同期包括四大行在内共有14家上市银行的净利润呈两位数增长。[查看全文]

(ECNS) – Net profit growth of China's banks has entered a slow phase, with five big banks posting single-digit profit growth in the first half of 2014, the Beijing Youth Daily reported.

Five of China's 16 listed banks, including Bank of Communications, China Citic Bank, Everbright Bank, China Construction Bank, and the Commercial and Industrial Bank, reported a net profit growth-rate of less than 10 percent. At the same time last year, only two banks, Bank of Communications and Citic Bank, saw single-digit growth in net profit.

Zhang Jinliang, deputy president of Bank of China, said it's a result of an economic slowdown at home and abroad, as well as China's gradual effort to overhaul the banking industry.

Net interest income accounted for most of the profit growth. The net interest margin -- the difference between interest paid and received, and a major gauge of lender profitability -- rose at most banks. The Commercial and Industrial Bank saw its net interest margin widen to 2.62 percent. The net interest margin at Construction Bank and Agricultural Bank rose to 2.8 percent and 2.93 percent respectively.

Ping'an Bank nailed the first spot with a 33.74 percent profit growth, and the Commercial and Industrial Bank had the biggest net profit of 148.4 billion yuan ($24 billion), exceeding the combined net profits of Sinopec, CNPC and CNOOC, China's three oil giants.

However, asset quality is still under downward pressure. By the end of June, the 16 banks' bad loans amounted to 558 billion yuan ($90 billion), and 77.2 billion yuan ($12.5 billion) were newly added ones.

Market analysts say the problem hasn't bottomed out yet. Lian Ping, chief economist at the Bank of Communications, said pressure from a slowing economy will continue to challenge banks' risk control. He estimates that the commercial banks' bad loan rate will slightly increase to 1.14 to 1.19 percent by year end.

Real estate loan quality and local government financing vehicles remain stable, but Lian warns of potential risks due to the sluggish property market and the rising percentage of real estate loans and local financing.