New | ICBC and CCB report flat annual profit growth amid surge in bad loans
China’s two biggest banks on Wednesday said they will strengthen risk control to combat rise in non-performing loans
Industrial and Commercial Bank of China and China Construction Bank, the nation’s two biggest banks, on Wednesday both pledged to strengthen risk control after reporting relatively flat growth in 2015 net profit amid a sharp surge of non-performing loans.
Industrial and Commercial Bank of China, the world’s largest bank by assets, said net 2015 profit rose 0.48 per cent year on year to 277.13 billion yuan (HK$331.8 billion), beating market expectations of 274.50 billion yuan.
The bank’s NPLs jumped 44.19 per cent to 179.52 billion yuan, while the NPL ratio widened to 1.50 per cent, from 1.13 per cent in 2014.
China Construction Bank reported net profit last year rose 0.14 per cent to 228.15 billion yuan, missing market expectations of 231.13 billion yuan.
The bank’s NPL ratio surged 39 basis points to 1.58 per cent, as bad debts soared 46.66 per cent to 165.98 billion yuan.
“Credit risk control is our key task this year, as the credit cost has become our largest cost,” ICBC chairman Jiang Jianqing said in a briefing in Hong Kong, adding that tools like debt-to-equity swaps and assets securitization are to be explored.