China bank profit growth slows alongside the economy

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China’s slowing economy hits bank earnings hard. The country’s top five banks all reporting first quarter profit growth this week of under two percent – the slowest in at least six years, and in the

China bank profit growth slows alongside the economy

China’s slowing economy hits bank earnings hard.

The country’s top five banks all reporting first quarter profit growth this week of under two percent – the slowest in at least six years, and in the case of top lender ICBC, eight.

A shock to many as previous first-quarter results were in double digits only a few years ago.

Bad loans have also been rising as the local economy cools with borrowers finding it more difficult to repay their loans.

The country’s debt-laden manufacturing sector has been especially hard hit with many factories closing down in the economic shift towards consumption-led growth.

To encourage more lending and prop up the economy, the country’s central bank has cut interest rates and lowered reserve requirements in the past six months.

Instead, banks saw falling net interest margins putting pressure on the bottom line.

However some analysts believe these measures may help to stabilize performance in the long run.

ENDS

Tags : Economy, Alongside, Slows, growth, profit, bank, china

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