ICBC, CCB, and Agricultural Bank of China all posted improved profitability.
China’s biggest banks are witnessing a surge in profitability as intensified scrutiny from regulatory authorities on the $7b shadow banking industry prompted borrowers back to major lenders.
Agricultural Bank of China earlier released its financial results showing faster-than-expected profit growth at 4.9% to CNY192.96b ($30.5b). This comes as operating income rose 6.1% to CNY 537.04b whilst its net interest margin widened to 2.28% YoY.
China Construction Bank smashed estimates after reporting a 4.7% gain to CNY242.26b. This comes as increased recognition of bad loans is boosting the recovery of the country’s large commercial banks after a few quarters of decline.
ICBC also beat initial profit expectations after net profits rose 2.8% YoY to CNY286.05b as non-performing loan ratio fell to 1.55% on the back of improved asset quality.
The two other large banks Bank of China and Bank of Communications are expected to post their financial results this week.
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