Bank of China back in black, CCB profit up

Big banks benefiting from campaign to clean up bad loans and risky lending

Bank of China swung back into the black last year while China Construction Bank joined the nation’s state-owned lenders in posting a profit on the back of an accelerating domestic economy.

Bank of China, the country’s main foreign exchange bank, swung from a near three per cent net loss in 2016 to a net profit of 172.4 billion yuan (Dh100.6 billion), up 4.8 per cent, according to a statement Thursday to Hong Kong stock exchange where it’s listed.

China Construction Bank (CCB), the country’s secondbiggest, had earlier reported to the exchange that 2017 net profit grew 4.7 per cent to 242.3 billion yuan, up from less than two per cent growth 2016.

Bank of China credited a “stronger-than-expected” economic expansion, adding that “China’s banking industry as a whole remained sound with steady growth in assets and liabilities”.

The remaining half of China’s “Big Four” banks - The Industrial and Commercial Bank of China and Agricultural Bank of China - had reported improved earnings earlier this week, citing similar factors.

China’s economy grew a forecast-beating 6.9 per cent in 2017, picking up steam for the first time since 2010.

All four of the big banks saw profit growth largely flat-line in the preceding two years.

But both Bank of China and CCB reported lower non-performing loans for 2017 due to “moderate deleveraging in the domestic financial system”.

Analysts said the big banks also are benefiting from the Chinese government’s campaign to clean up bad loans and risky lending in its often chaotic and murky financial system.