The cumulative profits of China’s big six state-owned banks breached the one trillion yuan threshold in 2018 on the back of healthy interest rate spreads.
ICBC’s led net profits amongst China’s big state-owned lenders in 2018 following YoY growth of 3.9% to reach 298.7 billion yuan.
China Construction Bank (CCB) took second place with YoY growth of 4.93% to reach 255.626 billion yuan, followed by Agricultural Bank of China, which saw YoY growth of 4.9% to hit 202.631 billion yuan, and Bank of China, whose profits attributable to shareholders rose by 4.45% to reach 180.086 billion yuan.
Net profits for Bank of Communications attributable to the parent company rose by 4.85% YoY to 73.63 billion yuan, while Postal Savings Bank of China saw the largest YoY net profit increase following its official inclusion as one of the country’s big six state-owned lenders, with a YoY rise of 9.80% to hit 52.384 billion yuan.
Domestic analysts say that growth in the profits of the big Chinese banks was largely driven by interest incomes as spreads remained ample.
In 2018 ICBC, ABC, Bank of China, CCB and Postal Savings Bank posted net interest spreads of 2.30%, 2.33%, 1.90%, 2.31% and 2.67%, for YoY gains of 8, 5, 6, 10 and 27 basis points respectively, while the interest spread of Bank of Communications held steady at 1.51%.