Agricultural Bank operating profit rises 39pc to 54b yuan
Operating profit at Agricultural Bank of China, the only one of the Big Four mainland banks yet to be restructured, rose 39 per cent to 54.3 billion yuan (HK$62.21 billion) in the first half of the year, the bank said yesterday.
Agricultural Bank saw its bad-loan ratio decline by 1.61 percentage points as the value of non-performing loans fell by 10 billion yuan, a further sign that the country's fourth-biggest lender is inching closer towards its planned stock-market listing.
But analysts said the first-half figures were disappointing after earlier reports put first-quarter profit up 71 per cent at 34 billion yuan. Earnings growth was also significantly down on last year, which saw operating profit soar 65.3 per cent to 96.1 billion yuan.
By comparison, Industrial and Commercial Bank of China's first-half profit expanded by more than 50per cent, while China Minsheng Banking Corp, Shanghai Pudong Development Bank and China Citic Bank all released preliminary earnings growth estimates in excess of 100per cent.
Agricultural Bank's decline in bad-loan ratio would reduce it to around 21.9 per cent according to previously released data - still by far the highest proportion of any mainland bank.
The ratio of bad loans at the mainland's big commercial banks dropped by 0.62 percentage point from the start of the year, to 6.1 per cent at the end of June, with total non-performing loans falling by 24.71 billion yuan to 1.18 trillion yuan, the China Banking Regulatory Commission said yesterday.
Mainland banks' total assets stood at 57.7 trillion yuan at the end of June, up 19 per cent on the same period last year. Liabilities totalled 54.4 trillion yuan, up 18.4 per cent, the regulator said.
'The real story when it comes to asset quality is that the current economic situation means that more borrowers are under strain. But this probably won't show up in the asset-quality figures till next year,' said Charlene Chu at Fitch Ratings.
At the weekend CBRC chairman Liu Mingkang called for greater scrutiny of changes in the property market, with a view to avoiding and controlling risks, including analysing the mortgage-lending pressure on commercial banks.
But Mr Liu said that the 'normal and reasonable' demands of the property market should be met amid concerns that government efforts to clamp down on property speculation could put many property developers out of business.
With tightening credit and higher interest rates hitting real estate developers and individual buyers alike, fears have risen that banks' exposure to the property market could lead to a new spate of bad loans.
'The worry has been about loans to developers rather than mortgages. The NPL rate for mortgages at most banks remains very low at 1-2 per cent,' said Ms Chu.
Agricultural Bank reportedly may suspend a plan to attract long-term strategic foreign investors.
