Growth of profits in China’s banks slowed in H1

Almaty. September 28. Silkroadnews – Growth of profits in China’s banks slowed in H1, Asia Times reported.
“Profit growth slowed at China’s 39 A- and H-share listed banks for the first half of the year, amid a growing ratio of credit and a fall in the rate of non-performing loan. The aggregate net profit of the 39 banks was 849.72 billion yuan for the first six months, a 4.5% rise from a year earlier,” the report said.
Though net profit continued to grow in all four categories of banks, including six large commercial banks, nine joint-stock commercial banks, 16 city commercial banks and eight rural commercial banks, most of them grew slower than during the same period last year.
As reported, all banks decreased net interest margin, a key indicator of profitability, due to switch from a business tax to a value-added tax. It is noteworthy that city and joint-stock banks experienced a sharp decline in their net interest margin having lost almost 40 basis points.
According to the publication, the balance of non-performing loans for 39 banks increased by 4.24% and amounted to more than 1300 billion as of June, while the loan yield ratio was 1.6%.
Large banks, such as ICBC, CCB, ABC, BOC and BOCOM, will continue to earn, but their non-performing loans remain a priority issue that needs to be addressed. The same is true for rural banks, whose asset quality is not very high. The joint-stock banks can suffer greatly, as some of their actions and transactions will be limited by regulators in the coming months. City banks with above-average profitability to wide extent depend on investment and might be affected by the shrinking interbank business, followed closely by regulators.