China’s Big Banks Face Debt Woes After Paring Profit Drops
- ICBC led mega banks to post a less than 5% decline in earnings
- Bad loan ratio seen rising after payment holiday ends in March
Banks including China Construction Bank Corp. all reported significantly smaller earnings declines than in the prior quarter.
Photographer: Billy H.C. Kwok/BloombergChina’s biggest state-owned banks are still plagued by a surge in bad loans even as an early containment of the pandemic and a recovery in the world’s second-largest economy helped them trim profit declines.
Net income slid less than 5% at Industrial & Commercial Bank of China Ltd. and its three largest rivals in the three months through Sept. 30, compared with an average 25% slump in the prior quarter. Still, the four banks saw their combined non-performing loans climbed to a record 979 billion yuan ($146 billion) after charging 175 billion yuan on credit impairments in the quarter, according to reports released late last week.