36 Chinese listed banks reap 1.75 trillion yuan income

Wednesday, May 20, 2020

The first-quarter net profit of 36 listed banks grew by 5.03 percent year-on-year despite the coronavirus pandemic, but down by 2.35 percentage points from the same period in 2019, given that the net profit growth of 51 listed banks increased to 7.23 percent in 2019, a reportd by EY says.

The 13th EY annual report on China' s listed banks, which covered all 51 Chinese listed banks.

Net fee and commission income growth dropped to 5.45 percent over a year ago in the first three months.

In 2019, benefiting from the accelerated operating income growth and slower growth in allowance provisioning, the net profit reached 1.75 trillion yuan (HK$1.91 trillion).

The net income generated from fee and commission of all listed banks grew by 9.66 percent year-on-year in 2019.

The loan impairment losses growth last year was up by 11.12 percent but fell by 17.67 percentage points as compared to 2018.

EY said there are many uncertainties, volatilities and resilience for China banks this year.

For non-performing assets, city commercial banks and rural commercial banks would have more impacts than that of large banks as the proportion of lending to small and medium enterprises for those banks was larger.

Under a situation of narrowing net interest margin, Geoffrey Choi, Asia-Pacific financial services assurance leader, suggested that China banks should now accelerate business transformation, putting more effort on retail business as the consumption market in China is large and the number of credit card owners in China is still low, as compared to other developed countries.

Furthermore, the overall net interest margin was 2.13 percent while the net interest margin of the personal loans was 3.12 percent.

Also, Choi suggested that banks accelerate the digitalization of financial services, providing customized services by using big data to analyze the customers' preferences.