Top banks report stable results in the first half

CHINA’S six largest commercial banks reported stable performances in the first half of 2019, with loan growth picking up and asset performance improving, Moody’s Investors Service said yesterday.

From January to June, loans of the six state-owned lenders jumped 10.1 percent compared with a year earlier. This acceleration was mainly driven by corporate loans as banks have stepped up lending to infrastructure projects and private small and medium-sized enterprises to support the real economy, the rating agency said.

Postal Savings Bank of China continued to grow its loans much faster than the other five banks, as it focused on rebalancing its assets toward higher lending penetration.

Growth of loans to individuals continued to outpace that of corporate loans but the differential narrowed to below three percentage points in the first half of 2019.

In particular, China Construction Bank and Bank of Communications reported corporate loan growth above individual loans in the first six months.

Moody’s expects loan growth to stay at low-teens percentage levels and above asset growth, as these banks need to fulfill their policy role to support economic growth.

Meanwhile, the big players saw their asset quality improve and loan loss reserves rise.

Due to Chinese authorities’ accommodative financial policy, banks’ key delinquency metrics improved, including non-performing loan, special mention loan and more than 90 days overdue loan ratios.