Mainland banks have room for rate cuts: EY

China's banks have room to cut their loan prime rates, which would narrow their net interest margin, a report by EY said.

The operating income of 59 listed banks in mainland China in 2021 rose 7.75 percent to 6 trillion yuan (HK$6.98 trillion). And their total net profit was 1.9 trillion yuan, up 12.05 percent over the previous year, according to the EY report titled Listed Banks in China - 2021 Review and Outlook.

Net profit growth mainly benefited from rising operating income, the continued growth in net fee and commission income and a lower level of impairment loss provision, the report said.

The banks also continued to respond to the government's call to support the real economy by lowering the financing costs of enterprises, it said.

EY also released an overview of the first quarter results of 42 A-share listed banks, which showed that they fared better than the same period in 2021.