China’s Big Four banks post stronger earnings as policy lending lifts growth
Strong loan growth to infrastructure and policy-backed sectors helps lift profits, while margins show early signs of stabilising
Combined net profit reached about 305 billion yuan (US$44.6 billion) in the first three months of the year, according to their filings, equivalent to roughly 3.4 billion yuan a day during the period.
The rebound was driven in part by a recovery in net interest income, which rose more than 7 per cent across all four banks. Net interest margin, a key gauge of lenders’ profitability, also showed early signs of stabilisation after a prolonged decline, with some lenders reporting slight sequential improvements.
Analysts led by Judy Zhang at Citi said in a recent report that the stronger results were supported by “resilient loan growth driven by government-related loans”, as banks stepped up financing to infrastructure and policy-backed sectors such as manufacturing.
They added that large state-owned lenders outperformed peers due to their stronger exposure to corporate and government lending, while easing margin pressure and lower funding costs helped support a recovery in interest income.
