Official data points to robust profits for the big five state-owned banks of Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank and Industrial and Commercial Bank of China in 2018.
Figures released by the China Banking and Insurance Regulatory Commission (CBIRC) indicate that the big commercial banks saw profits of 957.3 billion yuan as of the end of 2018.
Total assets were 98.35 trillion yuan, for slowing growth of 5.97% compared to the same period the previous year.
Growth in the balance sheets of the Chinese banking sector saw a marked deceleration in 2018.
As of the end of last year the domestic and foreign currency assets of China’s banking sector financial institutions stood at 268 trillion yuan, for YoY growth of 6.27%, as compared to a YoY rise of 8.68% for the fourth quarter of 2017.
The net profits of Chinese commercial banks in 2018 were 1.8302 trillion yuan, for YoY growth of 4.72% and a deceleration of 1.26 percentage points compared to the same period the preceding year.
The average return on capital for Chinese commercial banks was 11.73% in Q4 2018, for a YoY decline of 0.83 percentage points.
CBIRC data further indicates that municipal and rural commercial banks have emerged as leading drivers of lending to small and micro-enterprises amidst China’s push for greater financial inclusion.
As of the end of Q4 2018 the commercial bank balance of loans to small and micro enterprises stood at 25.2167 trillion yuan, for an increase of 1.874 trillion yuan compared to the end of 2017 or a rise of 8%.
Large-scale banks saw their share of the small and micro-loan balance decline for the third consecutive quarter, with joint-stock banks, municipal commercial banks and rural commercial banks picking up the slack.