Slower profit growth for two of China’s big four
(02 April 2013 – China) An economic slowdown has been attributed to two of China’s big four banks reporting slower profit growth in 2012.
Bank of China (BOC) said its net profit rose 12.2 percent from a year earlier to US$22.4 billion (A$21.5 billion) in 2012, the slowest growth since 2006.
BOC’s net interest income (its main source of profit) rose 12.7 percent year-on-year to US$41 billion.
At the same time, Agricultural Bank of China (ABC) recorded net profits to US$23.3 billion last year, a 19 percent year-on-year increase. Its profit growth was the slowest since 2010.
ABC's net interest income in 2012 improved 11.3 percent to US$55 billion year-on-year.
The banks blamed China's economic downtrend for depressing loan growth. China's interest rate liberalisation also contributed to hammering profit growth.
China's economy expanded 7.8 percent in 2012, its slowest pace in 13 years, in the face of weakness at home and in key overseas markets.
China's central bank last year expanded the range that banks' deposit and lending rates can float around benchmark levels, a move which could result in narrower net interest margins for banks.
BOC’s net interest income (its main source of profit) rose 12.7 percent year-on-year to US$41 billion.
At the same time, Agricultural Bank of China (ABC) recorded net profits to US$23.3 billion last year, a 19 percent year-on-year increase. Its profit growth was the slowest since 2010.
ABC's net interest income in 2012 improved 11.3 percent to US$55 billion year-on-year.
The banks blamed China's economic downtrend for depressing loan growth. China's interest rate liberalisation also contributed to hammering profit growth.
China's economy expanded 7.8 percent in 2012, its slowest pace in 13 years, in the face of weakness at home and in key overseas markets.
China's central bank last year expanded the range that banks' deposit and lending rates can float around benchmark levels, a move which could result in narrower net interest margins for banks.
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