China’s Mega Banks Face New Obstacles After Comeback Year
- Bank earnings boosted by economic recovery, easing loan losses
- Lenders face challenges from property sector, Covid outbreak
An Industrial and Commercial Bank of China (ICBC) branch in Shanghai, China.
Photographer: Qilai Shen/BloombergChina’s mega lenders, led by Industrial & Commercial Bank of China Ltd., delivered double-digit profit gains last year as business bounced back, but now face mounting challenges from the debt-plagued property sector and a growing Covid outbreak in the world’s second-largest economy.
China’s $54 trillion banking sector staged a recovery after policy makers moved to stabilize economic growth and loosened lending restrictions in the second year of the pandemic. ICBC, the world’s largest bank, saw profit rise 10.3% last year, the most in almost a decade. The other big lenders -- China Construction Bank Corp., Bank of China Ltd., Bank of Communications Co. and Agricultural Bank of China Ltd. -- all reported their fastest annual profit growth since at least 2013.