Economic review

Listed banks in China see rising profits: EY

2018-05-16 10:25:00 (Beijing Time)         Global Times

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Listed banks in China witnessed a continued uplift in profit growth amid technology-powered high-quality development, as their net profit growth has increased for two consecutive years, according to a report released by consulting firm EY on Tuesday.

The report said the 41 listed banks collectively realized a net profit of 1.54 trillion yuan ($242.47 billion) in 2017, up 5.1 percent year-on-year, growing by 1.42 percentage points faster than in the previous year.

For the 31 listed banks (including 26 A-share listed banks and five H-share listed banks) that have disclosed their results for the first quarter of 2018, the growth in total net profit saw a further increase of 5.95 percent as compared with the same period of 2017.

The report contributed the growth to the steady improvement in asset quality and slower growth in impairment allowances as the nonperforming loan (NPL) balances of the 41 listed banks totaled 1.31 billion yuan, up 56.8 billion yuan from the prior year-end, with the weighted average NPL ratio dropping to 1.55 percent from 1.65 percent at the end of 2016.

Geoffrey Choi, assurance leader of EY financial services in the Asia-Pacific, warned that for some listed banks, the balances of loans overdue for more than 90 days were still higher than the balances of NPLs, and borrowers from overcapacity industries and borrowers with high leverage were still exposed to credit risks, putting asset quality under significant pressure.