Weakened profitability of listed banks in 2013 Q1

By | April 27, 2013

As of the evening of April 26, all 16 listed banks in the A share had announced the first quarter results. Compared with the commonly excellent results in the 2012 annual reports, in the first quarter the 16 listed banks’ profitability see significant weakening and a collective decline in net profit growth. According to the preliminary statistics done by the Beijing News reporter, in the first quarter the total net profit of the 16 listed banks amounted to 309.1 billion yuan 3.4 billion yuan, an increase of 12.6%, lower than the 20% growth rate in the first quarter of 2012.
From the size of the banks’ profit in the first quarter, ICBC is still the most profitable bank in first-quarter with its net profit reached 68.8 billion yuan, China Construction Bank’s net profit growth rate is the fastest among the four big banks in China, net profit growth of Agricultural Bank of China and Bank of China is only 8.26% and 8.09% respectively. In the first quarter, ICBC, China Construction Bank, Agricultural Bank of China, Bank of China, Communication Banks with a total net profit of 234.9 billion yuan accounted for 76% of the total profit of the 16 listed banks.

Despite the slowdown of growth rate, the market had widely expected only single-digit growth, thus first quarter performance of the banking sector is significantly better than expected, with the net profit growth of only Pingan Bank, CITIC Bank, Bank of China and Agricultural Bank of China in the 16 listed banks below 10%.
BOCI report pointed out that increased uncertainty was found in the operating environment , the recovery of rapid net profit growth in the banking industry from 2013 to 2014 was unlikely. In the next 12 months, the growth performance of the banking sector will face the challenges caused by asset quality issues, macro-control and ect.

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