China Construction Bank 2015 net profits flat

SHANGHAI, March 31: China Construction Bank (CCB), the country’s second-largest lender, reported flat growth in net profit last year, as bad loans jumped with economic growth slowing.
The bank’s net profit edged up 0.14 percent year-on-year to 228.15 billion yuan ($35 billion) in 2015, slowing from a 6.1 percent annual increase in 2014, according to a statement released late on Wednesday.
CCB, one of the country’s “Big Four” state-owned lenders, said it “witnessed a more complex and changing global economic situation” including volatility in global financial markets and commodity prices.
China’s economy — the world’s second largest — grew 6.9 percent in 2015, the slowest pace in a quarter of a century.
The government is seeking to shift its economic drivers away from cheap exports and massive government investment to domestic consumption but has warned of slower growth under what leaders have dubbed the “new normal”.
“The growth in net profits of banks has dropped significantly due to fast rises in non-performing loans,” Guotai Junan Securities analyst Richard Cao told AFP.
CCB’s non-performing loan (NPL) ratio reached 1.58 percent last year, up from 1.19 percent in 2014. The bank’s Shanghai-traded shares closed down 1.02 percent on Thursday after the results announcement.
The Agricultural Bank of China (ABC) on Thursday reported the highest NPL ratio among the four major banks, rising to 2.39 percent at end-2015 from 1.54 percent in 2014.The bank, which has roots lending in rural areas, said net profit rose just 0.62 percent year-on-year to 180.58 billion yuan in 2015, according to a statement.
The other two of the “Big Four”, Industrial and Commercial Bank of China (ICBC) and Bank of China (BOC), on Wednesday also reported weak rises in net profit and growing bad loans.
ICBC, China’s biggest bank, said that net profit gained 0.48 percent year-on-year to 277.13 billion yuan in 2015.note last week.-Agencies