China Construction Bank Corp., the nation’s second-largest lender, joined the club of big Chinese banks reporting zero profit growth and rising bad loans as the government struggles to prop up the economy.
Net income for the three months through June 30 was 64.9 billion yuan (Dh37 billion), unchanged from a year earlier, based on an exchange filing on Sunday. That compared with the 65.3 billion yuan median of 10 analysts’ estimates compiled by Bloomberg.
Construction Bank was the last of the big Chinese lenders to report earnings for the second quarter. Industrial & Commercial Bank of China Ltd. also posted a profit that was little changed, while Agricultural Bank of China Ltd. had an 0.8 per cent decline in earnings.
Industrial overcapacity, a build-up of corporate debt and a $5 trillion (Dh18 trillion) stock-market slump are making it harder for Premier Li Keqiang to prevent a deeper economic slowdown. The combined earnings of China’s five biggest banks are projected to rise 2 per cent this year, the least since at least 2004, according to analysts’ estimates compiled by Bloomberg.
Construction Bank’s nonperforming loans jumped 28 per cent in six months to 144.4 billion yuan as of June 30, Sunday’s release showed. That boosted the lender’s bad-loan ratio to 1.42 per cent of outstanding credit from 1.19 per cent at the end of last year.
The banking giant — China’s number two by market capitalisation — also joined peers in reporting a decline in its net interest margin, which slipped to 2.67 per cent as of June 30, from 2.8 per cent a year earlier.
