Chinese banks’ assets, profits expand in Q2

Assets of large commercial banks expanded 7.9% during the quarter.

Chinese banks saw their assets and profits expand in the second quarter of 2024, according to data from the National Financial Regulatory Authority (NFRA).

Financial institutions’ (FIs) RMB and foreign currency assets rise 6.6% year-on-year (YoY) to RMB433.1t in Q2 2024, according to data from National Financial Regulatory Authority (NFRA).

Assets of large commercial banks expanded 7.9% YoY to RMB185.1t, accounting for 42.7% of the total assets.

Joint-stock commercial banks also saw their assets expand to RMB72.1t, 3.7% YoY higher than in Q2 2023. Joint stock commercial banks made up 16.7% of the total assets of banking institutions in China.

Accumulated net profit was RMB1.3t as of end-Q2, up 0.4% year-on-year. 

However, the average return on equity (ROE) of commercial banks was 0.65 percentage points lower at 8.91% in Q2 compared to the end of Q1.

The average return on assets (ROA) was 0.69%, down by 0.05 percentage points compared with the end-Q1.

Loans expand, bad loans fall
Asset quality of commercial banks remained stable as the value of bad loans declined, according to the NFRA.

The outstanding balance of non-performing loans (NPLs) of commercial banks was RMB3.3t for the quarter, down RMB27.2b from the end of Q1. NPL ratio is 1.56%, down 0.03 percentage points (ppt) over the same period.

Outstanding balance of performing loans of commercial banks was RMB210.8t.

Loans to micro and small enterprises (MSEs) reached RMB78t in Q2. Outstanding balance of inclusive loans to MSEs with a single account credit limit exceeding RMB10m rose 17.1% You to RMB32t.

Chinese FIs set aside more provisions in Q2, with the balance of loan loss provisions rising by RMB104b to RMB7t. The provision coverage ratio was 209.32%, up 4.78 percentage points from Q1.

The banks’ loan provision ratio was 3.26%, remaining basically unchanged compared with the end of Q1, the NFRA said.