Bank of China, Agricultural Bank of China 2020 profits beat estimates thanks to fourth quarter rebound
- Bank officials signaled cautious optimism for 2021, thanks to the country’s economic rebound from Covid-19
- On average the six biggest state-owned banks saw fourth-quarter net profit grow by 60 per cent, according Jefferies
Bank officials signaled cautious optimism for 2021, believing the worst of the pandemic’s impact on their asset quality to be largely over, thanks to the country’s economic rebound.
By Tuesday, China’s six leading state-owned commercial banks had reported their full-year results. On average their fourth quarter net profit grew by 60 per cent, according to Chen Shujin, an analyst at Jefferies.
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Net profit at Agricultural Bank of China rose 1.8 per cent to 215.9 billion yuan (US$32.9 billion), beating the 6 per cent decline forecast by analysts polled by Bloomberg.
Its non-performing loan (NPL) ratio rose to 1.57 per cent last year, from 1.4 per cent in 2019. The net interest margin, a key gauge of banks’ profitability, was flat at 2.2 per cent from 2.23 per cent a year ago.
