Barclays Analysts See Stable Profit Growth at Large China Banks

China’s largest banks will report relatively stable profit growth for the third quarter because they suffered less from interest rate cuts than their smaller rivals, analysts at Barclays Plc said.

The biggest lenders may post net income growth of 11 percent, compared with 13 percent in the second quarter, Hong Kong-based analysts led by May Yan wrote in a note published today. Smaller so-called joint-stock banks may see net income growth slow more steeply, to 12 percent from 24 percent, the analysts wrote.

Agricultural Bank of China Ltd., the third-largest by market value, and China Merchants Bank Co. (3968) may outperform with growth of 15 percent, she wrote.

Net interest margins, which measure lending profitability, have narrowed at Chinese lenders and credit costs have risen since the government cut interest rates and changed the way banks price loans and deposits in the third quarter.

To contact Bloomberg News staff for this story: Aipeng Soo in Beijing at asoo4@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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