Economy lifts China Construction Bank profits

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SHANGHAI: China Construction Bank, one of the country’s “big four” financial institutions, reported a moderate first-half profit rise and improving asset quality as a government crackdown on bad debt kicked in.

The bank’s earnings were posted Wednesday night, hours after China’s three other big state-owned lenders announced similar results for January-June, which they credited to the de-leveraging campaign and stabilising economic fundamentals.

China Construction Bank (CCB) earned a profit of 138.34 billion yuan ($21.0 billion) in the first half, up 3.7 percent year-on-year, it said in a statement to the Hong Kong stock exchange, where it is listed.

That marks a slight improvement on the 1.1 percent increase reported in the first half of 2016.

CCB added that its non-performing loans (NPL) ratio was 1.51 percent in the period, down from 1.52 percent in the second half of 2016, and 1.58 percent in the six months before that.

China’s banks, which have generally reported flat results in recent years, have benefited this year from faster-than-expected 6.9 percent economic growth in the first half.

They have said bottom lines were further bolstered by the government campaign launched earlier this year to cut mounting debt and dispose of bad loans.

CCB said it reviewed and tightened up its lending policies and “continuously enhanced its credit structure” during the period.

“In the first half of the year, the banking industry was overall stable with more reasonable growth rate of assets, and the risks were within control,” CCB said.

While noting a “complex and grim business environment” worldwide, the bank expressed optimism for the future, saying the Chinese and global economies were expected to strengthen.

Bank of China, Industrial and Commercial Bank of China, and Agricultural Bank of China reported similar net profit gains and improved asset quality for the first half.

Shares in major Chinese financial institutions have climbed in recent weeks on improving sentiment.

However, China Construction Bank dipped 2.14 percent in Hong Kong and 1.42 percent in Shanghai on Thursday morning, roughly in line with shares of the other three lenders.

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