Chinese banks to post slow profit growth for fifth straight year
- Banks traded on the stock markets of Shanghai and Shenzhen are on track for a 6.7 per cent profit rise for 2018, according to a Ping An Securities forecast
Chinese banks, habitual profit stars on the mainland stock markets, are poised to report single-digit profit growth for the fifth consecutive year in 2018 as the world’s second-largest economy expanded at its slowest pace since 1990.
The lenders traded on the Shanghai and Shenzhen bourses are likely to post a 6.7 per cent profit rise year on year, according to a forecast by Ping An Securities.
Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB) will report earnings on Thursday, while Bank of China (BOC) and Agricultural Bank of China will report on Friday.
For the decade between 2003 and 2013, mainland banks reported annualised profit gains of 49 per cent, benefiting from the nation’s debt-fuelled economic expansion.
Banks’ performance last year was described as “stable” by analysts as most public lenders managed to contain the growth of bad loans amid the economic slowdown and the tit-for-tat trade war between China and the US.
“But they mainly relied on a credit boom to achieve profit increases,” said Wang Feng, chairman of Shanghai-based financial services firm Ye Lang Capital. “The stable performance was still a result of easy credit, rather than better financial services.”
On the mainland, deposit and lending rates at banks are still guided by the central bank.