China's biggest banks learn to cope with sluggish growth
While the days of double-digit profit gains are over, the key challenge for the mainland's largest lenders is how they deal with mounting bad debt
Slower economy, slower banks - the concept does not defy logic, even on the mainland.
The real question for the mainland's biggest lenders last year was to what degree an economic slowdown had dragged on profits in an industry accustomed to posting double-digit growth.
Even more carefully watched as the banks reported earnings for last year was their recognition of mounting bad debt and how that trend was set to continue this year.
"The main risk for banks right now is asset quality," said Chen Xingyu, an analyst at Phillip Securities. "There was no real surprise on profits."
As was widely expected, profit growth for the mainland's biggest banks decelerated significantly last year.
Most notably, profits at Industrial and Commercial Bank of China, the world's biggest bank by assets, halved between 2013 and 2014. The lender undershot analyst expectations to notch 5 per cent profit growth after logging a more than 10 per cent gain one year earlier.
It is a similar story at ICBC's peers. Bank of China and Agricultural Bank of China both reported about 8 per cent growth, down from above 12 per cent and 14 per cent respectively.