China’s Big Six bank earnings to reflect recovery from Covid, stronger loan book
- Leading state-controlled banks are likely to report earnings growth of between 8 and 15 per cent for 2021, according to analysts’ estimates
- Banks’ improved earnings for 2021 to reflect recovery from the worst of the pandemic seen in 2020
China’s biggest state-controlled lenders are likely to report stronger earnings for last year on the back of a surging economy that accelerated loan growth and lower bad-loan provisions.
Bank of Communications releases its full-year earnings later today. Peers Bank of China and China Construction Bank report on Tuesday, followed by Industrial and Commercial Bank of China, Agricultural Bank of China and Postal Savings Bank of China on Wednesday.
The big six Chinese banks are likely to post a profit growth of between 10 per cent and 15 per cent, according to Chen Shujin, an analyst at Jefferies. Morningstar predicts 8 per cent to 10 per cent gain.
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“Retail sales and domestic tourism had shown a strong rebound at various times last year despite pockets of Covid-19 outbreak,” said Chen. “The improvement in earnings reflect a recovery from the worst of the pandemic seen in 2020.”
These forecasts are in line with the net profit for the industry, which rose 12.6 per cent to 2.2 trillion yuan (US$345 billion) last year, according to figures released by China Banking and Insurance Regulatory Commission (CBIRC) in February. That figure includes profit at smaller listed banks, such as Ping An Bank and China Merchants Bank, which have already reported their annual results.
