The latest financial results released by China’s six major state-owned banks indicate a decrease in profit margins.
On April 29, Industrial and Commercial Bank of China (ICBC) announced on the Hong Kong Stock Exchange that it achieved operating income of 212.774 billion yuan in the first quarter of this year, a 3.22% year-on-year decrease. Net profit was 84.156 billion yuan, down 3.99% year-on-year. The balance of non-performing loans stood at 395.399 billion yuan, an increase of 15.941 billion yuan from the end of last year, with a non-performing loan ratio of 1.33%.
China Construction Bank announced that it achieved operating income of 190.07 billion yuan in the first quarter, down 5.4% year-on-year. Net profit was 83.742 billion yuan, a decrease of 3.64% year-on-year. The balance of non-performing loans was 358.136 billion yuan, an increase of 13.445 billion yuan from the end of last year, with a non-performing loan ratio of 1.33%.
Bank of China announced that it achieved operating income of 164.911 billion yuan in the first quarter, representing a 2.41% year-on-year increase. Net profit was 54.364 billion yuan, down 2.9% year-on-year. The balance of non-performing loans was 281.208 billion yuan, with a non-performing loan ratio of 1.25%.
Postal Savings Bank of China announced that it achieved operating income of 89.363 billion yuan in the first quarter, down 0.07% year-on-year. Net profit was 25.246 billion yuan, a decrease of 2.62% year-on-year. The balance of non-performing loans was 85.294 billion yuan, an increase of 4.975 billion yuan from the end of last year, with a non-performing loan ratio of 0.91%.
Agricultural Bank of China announced that it achieved operating income of 186.735 billion yuan in the first quarter, an annual increase of 0.32%. Net profit was 71.931 billion yuan, up 2.2% year-on-year. The balance of non-performing loans was 334.644 billion yuan, an increase of 12.479 billion yuan from the end of last year, with a non-performing loan ratio of 1.28%.
Bank of Communications announced that it achieved operating income of 66.44 billion yuan in the first quarter, down 1.13% year-on-year. Net profit was 25.372 billion yuan, an increase of 1.54% year-on-year. The balance of non-performing loans was 115.451 billion yuan, an increase of 3.774 billion yuan from the end of last year, with a growth rate of 3.38% and a non-performing loan ratio of 1.30%.
According to Reuters, Bank of Communications and Agricultural Bank of China saw slight increases in net profit in the first quarter, by 1.5% and 2.2% respectively. However, the profit margins of both banks have declined. The non-performing loan ratios of all banks have remained stable or slightly decreased. Analysts, however, indicate that in the coming months, non-performing loan ratios may rise across the board.