China's four state-owned banking giants, all listed, reported over 700 billion yuan of gross net profit in the first three quarters of this year, showing slowdown in profit growth.
Industrial and Commercial Bank of China (ICBC) pocketed 222.3 billion of net profit in the first nine months, followed by China Construction Bank (CCB), Agricultural Bank of China (ABC) and Bank of China (BOC) with 192.076 billion yuan, 153.37 billion yuan and 137.874 billion yuan respectively.
However, their net profit growth all slowed down during the period, averaging less than one percent for most of them including ICBC, ABC and BOC, with respective growth rate at 0.65 percent, 0.57 percent and 0.73 percent. Many joint stock commercial banks also saw sliding profitability.
In the third quarter, China Everbright Bank made 23.916 billion yuan of net profit, up 2.37 percent year on year, lower than its comparable growth in the second quarter.
Zhao Xijun, deputy director of the Finance and Securities Institute of Renmin University of China, noted that seeking new growth points would be crucial for Chinese banks in the general decline of lending returns.
China's large banks also bore greater risk-control pressures. The four lenders' non-performing loan (NPL) ratio climbed in the third quarter, with ABC's NPL ratio up to 2.02 percent and the three others at around 1.45 percent. The same thing happened to joint stock commercial banks such as Industrial Bank Co., Ltd., China Everbright Bank, China CITIC Bank and Shanghai Pudong Development Bank and their NPL ratio went up to 1.57 percent, 1.43 percent, 1.42 percent and 1.36 percent respectively.
Till the end of 2015, Chinese banks' NPL ratio might continue to pick up despite their efforts to speed up NPL treatment but their NPL risks would generally remain controllable, predicted Zhao.
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