China’s big banks pledged in their annual earnings reports to continue to push the debt-for-equity program to reduce the corporate debt burden and contain the risk of corporate credit defaults. A debt-for-equity swap allows creditors to cancel some or all of the debt in exchange for equity in the debtor. Bank of Communications (BoCom), China’s fifth-biggest lender by assets, posted flat quarterly profit due to lower margins, but growing lending amid a liquidity squeeze helped the bank turn in a better-than-expected annual result. BoCom, the first bank among the Big Five lenders to report annual earnings, saw its full-year profit rise 1.03% to CNY67.21 billion by the end of 2016. Its fourth-quarter profit was CNY14.63 billion, compared with CNY14.49 billion a year earlier. BoCom’s net interest margin was 1.88% in December. The bank’s net interest income fell to CNY134.87 billion last year from CNY144.17 billion a year ago. BoCom’s non-performing loan ratio improved slightly as it fell to 1.52% in December from 1.53% a year earlier due to tighter risk control.

China Construction Bank (CCB) reported a better-than-expected 1.45% increase in net profit to CNY231.5 billion. Its NPL ratio fell to 1.52% at the end of last year from 1.58% a year earlier. Ping An Securities Co Analyst Li Yamin predicted CCB will gain from growing loans for infrastructure projects in 2017. The Industrial and Commercial Bank of China (ICBC), the world’s largest bank by assets, reported a 0.4% rise in profit to CNY278.2 billion. The lender’s total assets rose 8.7% year-on-year to CNY24.14 trillion. Net interest income dropped by 7.1% to CNY471.85 billion, as the banking regulator cut the key interest rate six times in a row from 2014 to 2015. ICBC lent 23% more in new loans, totaling CNY74.14 billion last year. Its non-performing loan ratio was flat at 1.62% at the end of December, with total non-performing loans at CNY211.8 billion.