SHANGHAI: The Agricultural Bank of China, one of the country’s “Big Four” state-owned banks, said its net profit for the first half of 2015 rose only 0.3 percent year-on-year, citing the slowing domestic economy and growing bad loans.
Net profit was 104.32 billion yuan ($16.3 billion) in the first six months, against 104.03 billion yuan for the same period last year, it said in a statement to the Hong Kong stock exchange late Thursday.
The bank, which has traditionally served rural areas of China, said downward pressure on the world and domestic economies, as well as increased bad loans, weighed on its performance.
“Currently, global economic development remains unstable and uncertain. China’s economy is still confronted with great downward pressure,” bank Chairman Liu Shiyu said in the statement.
China’s economy grew 7.0 percent in each of the first two quarters, slowing from a 7.4 percent expansion last year, which was its weakest since 1990.
“In the face of various challenges such as increasing non-performing loans and slowing profit growth, the bank has a difficult task of preventing and controlling business risks,” Liu said.
The bank’s non-performing loans (NPL) rose to 159.54 billion yuan, implying an NPL ratio of 1.83 percent by the end of June, up from 1.54 percent at the end of last year, according to the statement.
The bank’s stock was down 0.34 percent in Shanghai and lost 0.63 percent in Hong Kong near midday on Friday after the results announcement.
The Industrial and Commercial Bank of China, the country’s biggest bank, on Thursday reported a less than one percent year-on-year rise in net profit to 149.02 billion yuan for the first half, also affected by the slowing economy.