GDP growth helps 2 lenders cut NPLs
SHANGHAI: Two of China’s biggest lenders cut their badloan ratios as they notched improved profits last year, a sign that the nation’s banking industry benefited from a rebound late last year in the world’s secondbiggest economy.
Earnings reports the past two days from China Construction Bank Corp and Agricultural Bank of China Ltd, the nation’s secondand third-largest lenders by assets, both beat analysts’ estimates, helped by a drop in expenses. The country’s big banks are all releasing full-year results this week, with Bank of China Ltd due today.
Before this week, analysts had expected the five largest lenders to report their first decline in combined annual profit since 2004. While the Construction Bank and Agricultural Bank numbers already indicate a better overall outcome, some analysts remain cautious on reading too much into the improved non-performing loan (NPL) figures, amid mixed views on whether China’s economy can sustain its fourthquarter revival.
“The improving asset quality at banks naturally reflects the economic rebound last year,” said Larry Hu, head of China economics at Macquarie Securities Ltd in Hong Kong.
Robust consumption and a manufacturing rebound helped China’s economy grow a fasterthan-estimated 6.8 per cent in the fourth quarter. Still, the fullyear expansion of 6.7 per cent was the slowest since 1990, and economists in a Bloomberg News survey expect growth to weaken