The last three of the 16 mainland-listed lenders reported earnings for the third quarter that were mostly in line with market estimates.
Mid-sized lender Industrial Bank yesterday reported a 41 per cent increase in third-quarter net profit from a year ago, according to a statement filed with the Shanghai Stock Exchange. Earnings in the three months to September reached 9.24 billion yuan (HK$11.37 billion) while net interest income rose 43 per cent to 18.36 billion yuan.
Bank of Beijing, a city commercial bank, reported a 28.3 per cent growth in net profit to 3.57 billion yuan.
Earnings at Shanghai Pudong Development Bank rose 27 per cent to 8.93 billion yuan, but bad loans rose because of deteriorating credit conditions in Zhejiang province.
The bank said late on Tuesday that net interest income went up by 17.4 per cent to 18.37 billion yuan, and net fee and commission income grew by 37.4 per cent to 2.23 billion yuan.
Non-performing loans totalled 8.72 billion yuan, an increase of 2.9 billion yuan from the end of June, of which 94 per cent was set aside for its three branches in Wenzhou, Hangzhou and Ningbo in Zhejiang, bank vice-president Liu Xinyi said on Tuesday night.
According to an earlier report in the official China Securities Journal, the non-performing loan ratio of banks in Wenzhou, the mainland's entrepreneurial hub, rose for the 12th consecutive month to reached 3 per cent at the end of August.
Pudong Development Bank's non-performing loan ratio stood at 0.58 per cent at the end of September, an increase of 0.14 percentage point from the beginning of this year.
The bank said the credit risk in Zhejiang was unlikely to increase unless the mainland economy took a dive.
Looking ahead, "mainland banks will see pressure in net interest margin in the first quarter of next year", said Ni Jun, an analyst with Shenyin Wanguo Securities in Shanghai, as the central bank's earlier cuts in interest rates hit.
The level of non-performing loans would likely continue to rise as the impact of a slower economy on asset quality took effect, he said. He expected the level of banks' non-performing loans to peak in the middle of next year if the economy bottomed out at the end of this year.