Mid-sized banks suffering profit fall
February 23, 2015 Category Finance, Weekly
Preliminary earnings results from China Merchants Bank, China Minsheng Bank and Citic Bank showed soaring operating expenses in the last three months of the year, which slowed profit growth to record lows. For Minsheng Bank, that meant recording just 5.4% growth for 2014, the first time in its 19-year history that it has notched single-digit growth. Merchants Bank’s profits grew by 8.1% and Citic’s by just 3.9%. Most analysts believed the surge in operating costs was due to charges taken on bad loans. Minsheng Bank’s non-performing loan (NPL) rate leaped to 1.17% at the end of December from 1.04% just three months earlier. Merchants Bank’s rate edged up by just 0.01 percentage point, while Citic’s even fell. Those two banks hit the market with their bad debt, selling enough to investors to keep bad debt rates down, analysts said. “The NPL rate increase at Merchants was low but the main reason for low profit growth was still the cost of credit,” said Chen Shujin, Analyst at DBS Vickers in Hong Kong. “We have seen that they were very active in selling off distressed debt portfolios.” More than 20 banks sold about CNY120 billion in bad debt in China during 2014, more than double the year before.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world