Chinese bank profits expected to have surged in first half as economic rebound eased the burden of bad loan provisions
- Analysts expect Chinese lenders to post an average 23 per cent profit growth for the second quarter, which would help lift first-half growth
- State-owned commercial banks including Bank of China and China Construction Bank are scheduled to report their first-half earnings on Friday and Monday
Chinese banks’ profits are expected to have grown by an average of 23 per cent in the second quarter from a year ago, as sustained economic growth eased the burden of bad loans that had been weighing on their earnings.
For the sector as a whole, net profit in the first half increased 11.1 per cent from the same period a year ago, according to data from the China Banking and Insurance Regulatory Commission released early this month. That compares to a profit decline of 9.4 per cent during the first half of 2020.
“For the several banks that have already reported their first-half earnings, overall loan growth has kept up with the strong momentum we saw in 2020,” said Chen Shujin, an analyst at Jefferies. “The improvement was also driven by better asset quality.”
A few Chinese lenders reported their first half results earlier in August. Ping An Bank, for example, reported a 28.5 per cent rise in profit.