The latest round of quarterly performance results from China’s banking sector financial institutions point to robust profit growth across the board.
41 A-share listed banks in China had fully completed the release of their third quarter performance results as of 30 October, with the big six state-owned lenders posting an especially strong performance.
ICBC saw net profits attributable to the parent company of 251.821 billion yuan for the first three quarters of 2021, for a year-on-year (YoY) rise of 10.12%.
Agricultural Bank of China (ABC) saw profits of 186.709 billion yuan, for a YoY rise of 12.93%, while for Bank of China (BOC) the reading was 163.523 billion yuan, for a YoY rise of 12.22%. China Construction Bank (CCB) posted net profits of 232.153 billion yuan, for a YoY rise of 12.79%.
Bank of Communications (BOCOM) and Postal Savings Bank of China (PSBC) both posted YoY growth in net profits of over 22%, with readings of 64.36 billion yuan (22.10%) and 64.507 billion yuan (22.07%) respectively.
“The double digit growth in net profits was the result of multiple factors,” said Hou Duyang (后杜阳) from Bank of China’s research institute to the Chinese central bank’s news outlet.
“In terms of macro-economic conditions, China’s GDP grew 9.8% in the first three quarters compared to the same period last year. Economic growth improved overall, and consumption became a main driver of economic growth.
“A positive cycle of consumption spurring internal demand, and internal demand driving growth, has gradually formed, and banking sector retail operations welcome huge room for growth.”
Hou expects banking sector financial institutions to expand lending levels, with improvements to finance demand and asset quality in the real economy giving support to banking operations.
Policies for the deferral of principal and interest payments due to COVID-19 are also set to terminate at the end of the year, which could put pressure on asset quality.