China’s Big Banks Brace For Lagging COVID-19 Risks As Bad Loans Rise

16Views

August 30, 2020

BEIJING/SHANGHAI: Four of China’s five largest state-owned banks said they have increased their provisions against bad debt to brace for future losses due to the impact of the global coronavirus pandemic.

All five reported their biggest profit falls in at least a decade and an increase in soured loans when announcing their half-year results on Sunday and last week.

The results highlight the impact of the pandemic and the economic slowdown on Chinese banks that bucked the first-quarter global trend with higher profits and steady bad loans.

Agricultural Bank of China Ltd (AgBank) said “the lagging impact of the epidemic and the risk of uncertainty are expected to be further transmitted to the banking industry,” in its half-year results on Sunday.

China Construction Bank Corp (CCB), the country’s second-largest lender by assets, said it plans to assess credit risks and up provisions, just as Bank of China Ltd (BoC) said the same.

Even more directly, Bank of Communications Co Ltd said on Friday it had boosted “provisions to counter the future impact of the pandemic.”

As the pandemic batters economies globally, BoC, the most international of China’s large state banks, said it would keep guarding against global financial market risks in the second half.

SLIM MARGINS

Net interest margins (NIM) – a key gauge of bank profitability – fell at Industrial and Commercial Bank of China (ICBC),, the world’s largest commercial lender by assets, BoCom, CCB and AgBank.

But at BoC, NIM improved slightly to 1.82% from 1.8% three months earlier.

AgBank’s fell to 2.14% at the end of June from 2.17% at the end of March, while at ICBC it narrowed to 1.98% at the end of the second quarter, from 2.2% at the end of the first.

Non-performing loan (NPL) ratios rose at the big five banks during the reporting period, with that of ICBC increasing to 1.5% by the end of June from 1.43% three months earlier, and that of CCB rising by 0.07 percentage points in second quarter to 1.49%.

Chinese commercial banks overall posted a 9.4% drop in first-half net profit to 1 trillion yuan, according to data from the China Banking and Insurance Regulatory Commission.

Also Watch

SSR Case: Rhea Chakraborty Says, “I Have Never Consumed Drugs, Deny All The Allegations”

($1 = 6.8647 Chinese yuan renminbi)

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Array
(
[videos] => Array
(
[0] => Array
(
[id] => 5f4b82797c39367400fa7b08
[youtube_id] => GK4MRryb87I
China’s Big Banks Brace For Lagging COVID-19 Risks As Bad Loans Rise => SSR Case: Rhea Chakraborty Says, “I Have Never Consumed Drugs, Deny All The Allegations”
)

[1] => Array
(
[id] => 5f4b77b5ebd381740654daae
[youtube_id] => 992c4K3w1s4
China’s Big Banks Brace For Lagging COVID-19 Risks As Bad Loans Rise => Maha Govt Demands Probe Into Sushant Singh Rajput’s Friend Sandeep Ssingh’s Political Links
)

)

[query] => https://pubstack.nw18.com/pubsync/v1/api/videos/recommended?source=n18english&channels=5d95e6c378c2f2492e2148a2,5d95e6c278c2f2492e214884,5d96f74de3f5f312274ca307&categories=5d95e6d7340a9e4981b2e10a&publish_min=2020-08-27T16:22:06.000Z&publish_max=2020-08-30T16:22:06.000Z&sort_by=date-relevance&order_by=0&limit=2
)

China’s Big Banks Brace For Lagging COVID-19 Risks As Bad Loans Rise

Also Watch

Speak Your Mind

LEAVE A REPLY Cancel reply

Get in Touch

Recommend for You

Oh hi there It’s nice to meet you.

Subscribe and receive our weekly newsletter packed with awesome articles that really matters to you!

You might also like

EDITOR PICKS

POPULAR POSTS

POPULAR CATEGORY

About Us

Follow Us

Support Us & Be a Patreon

Add QNewsHub to your Homescreen!

Oh hi there
It’s nice to meet you.