Listed banks see first profit growth in 6 years

The 37 listed banks in the Chinese mainland recorded net profit of 1.45 trillion yuan ($210.88 billion) in 2016, up 3.65 percent year-on-year, a report from consulting firm EY showed Monday.

It was the first time that the net profit growth of listed banks saw a rebound since 2011. Among 28 listed banks that have reported earnings for the first quarter of 2017, net profit increased by 3.69 percent year-on-year, 0.98 percentage point faster than the growth pace seen during the previous cycle, the report said.

However, both nonperforming loan (NPL) balances and NPL ratios of the 37 listed banks continued to rise due to a combination of macroeconomic slowdown, increased risk exposure to industries burdened with overcapacity, and adjustments to commodity prices.

As of December 31, 2016, NPL balances at these banks totaled 1.24 trillion yuan, up 184 billion yuan year-on-year, while the NPL ratio rose to 1.65 percent from 1.59 percent at the end of 2015, albeit at a slower pace.

As of March 31, 2017, the total NPL balances at the 28 listed banks that have disclosed their quarterly performances reached 1.24 billion yuan, up 24.0 billion yuan from the 2016 year-end, while the NPL ratio dropped to 1.64 percent from 1.66 percent at the 2016 year-end.

The report said that, in addition to credit risk, listed banks also face cross-sector and cross-border risks as they endeavor to accelerate their business transformation, enhance their integrated financial services capabilities and expand their international footprints.

Listed banks should prevent risks during their business transformation and further enhance risk management, it said.