Pwc: Chinese Listed Banks Enter A Period Of Stability

by swisscham in Consulting, Legal, Services, Tax

PwC released its latest China Banking Newsletter – Review and Outlook of ChinaÕs Banking Industry in the First Half of 2017.Ê The report indicates that Chinese listed banks are entering a period of stability. Further, it shows that net profit of Chinese listed banks maintained growth in the first half of this year, albeit at a slightly slower pace than the same period last year. Additionally, both the non-performing loan ratio and overdue loan ratio declined. PwCÕs Banking Newsletter covers the financial results of the first half of the year for 39 A-share and/or H-share listed banks, published by the end of June, 2017. The report follows China Banking Regulatory CommissionÕs categories which include six Large Commercial Banks, nine Joint-Stock Commercial Banks, 16 City Commercial Banks and eight Rural Commercial Banks. According to the report, Chinese listed banks chalked up a net profit of RMB 849.72 billion in the first half of 2017, marking a year-on-year increase of 4.50%. The pace of growth slowed down slightly compared with the same period in 2016. Both the overall return on assets (ROA) and return on equity (ROE) declined. Except for Large Commercial Banks, the overall ROA of other listed banks has reduced significantly to below 1%. According to the report, by the end of June 2017, the value of outstanding non-performing loans had reached RMB 1.3 trillion, up 4.24% from the end of 2016. The non-performing loan ratio was 1.60%, down 0.05% from the end of 2016. Also, the NPL and the special-mention loan ratios of listed banks in all categories dropped from the end of 2016. The upward trend could be indicative of credit risk yet to be fully exposed and consequently, should be observed closely.

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