Mainland China’s largest lenders – also called the ‘big six banks’ – all reported higher profits in the first half of 2022 but none were left unscathed by the ongoing property crisis.
All of China’s six largest banks recorded profit growth in the first half of 2022, according to earnings data compiled by finews.asia, with the Postal Savings Bank of China (PSBC) leading the pack with a 14.9 percent increase in net income to 47.1 billion yuan.
The remaining all registered mid-single-digit profit growth including ICBC (up 4.9 percent to 171.5 billion yuan), Agricultural Bank of China (up 5.4 percent to 128.9 billion yuan), Bank of China (up 6.3 percent to 119.9 billion yuan), China Construction Bank (up 5.4 percent to 161.6 billion yuan) and Bank of Communications (up 4.8 percent to 44 billion yuan).
Property-Linked NPL
With the exception of a slight uptick at Bank of China (1.3 percent to 1.34 percent), non-performing loans at the country’s big six lenders all fell lower. Nevertheless, none were unscathed by the ongoing property crisis.
At China’s largest lender ICBC, real estate-linked NPL rose 15 percent to 5.47 percent. The surge is even more severe at rival lenders like Bank of China (20 percent), China Construction Bank (68 percent) and Bank of Communications (79 percent).
Chinese banks are facing a challenging period in the country as their balance sheets face pressure from strict Covid controls and a slowing economy. This is most notably attributable to exposure in real estate which has faced a myriad of troubles including liquidity stress at developers and mortgage boycotts over unfinished housing projects.
