China’s two largest state-controlled banks post their weakest quarterly profit growth in more than two years.

  
Analysis, Economy

Reuters reporting on Industrial and Commercial Bank of China (ICBC) and China Construction Bank Corp

  • ICBC flat net profit for the fourth quarter, the first time it has seen no growth in a quarter since the July-September 2016 quarter
  • Construction Bank posted a 1 percent drop in net profit, its first quarterly decline since the October-December 2015 quarter
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  • non-performing loan (NPL) ratios edged down by 0.01 percentage points at each bank
  • both increased their provisions for future bad debt
  • “We deeply feel it’s quite difficult to maintain the low bad loan level. There are external factors, our own reasons, problems with multi layers of local governments and other pressure,” said Xu Yiming, CCB’s chief financial officer, in Beijing on Thursday.”Do not think we are doing so well with 1.46 percent NPL ratio. It is very fragile. Once the environment changes, it can increase.”
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