Agricultural Bank of China's net profit grows by 12.65 per cent
Bad loans at the mainland's fourth-largest bank by assets remain high at 1.24 per cent but it is rising at a slower rate than two of its big rivals
Agricultural Bank of China, the mainland's fourth-largest lender by assets, posted the strongest net profit growth along with the highest non-performing loan ratio among rivals that have reported interim earnings this year.
The non-performing loan ratio remained high at 1.24 per cent but rose just two basis points from the end of last year, a slower rate of growth than at Bank of China and Bank of Communications, both of which reported interim earnings last week.
That puts Agricultural Bank well above the sector average for non-performing loans of 1.08 per cent. The average at the five biggest banks was 1.05 per cent in the second quarter, the banking regulator said earlier this month.
"Non-performing loans [at Agricultural Bank] are quite high but the growth in those loans has stayed slow," said Tang Yayun, an analyst at Northeast Securities in Shanghai. "I think we can say that its bad loans are stable now, especially when you compare that to other banks in China."
The bank's share price closed 0.27 per cent lower before the results were announced. The Hang Seng Index fell 0.37 per cent.