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Yulu Ao

China’s largest state-owned banks delivered stronger-than-expected first-quarter earnings, with rising interest income and steady asset quality pointing to improving credit demand as Beijing ramps up support for key sectors of the economy.
The Big Four lenders – Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC) and Bank of China (BOC) – all reported growth in both revenue and net profit, marking a turnaround from the margin pressure seen in recent years.
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.

The earnings suggest that policy-driven lending is beginning to filter through the financial system, as banks channel more credit towards government-backed priorities such as hi-tech manufacturing, green energy and infrastructure.
ICBC said its yuan-denominated loans increased by nearly 1.1 trillion yuan during the quarter, while CCB expanded its domestic corporate loan book by nearly 8 per cent. ABC continued to step up lending to rural regions and technology firms, with loans to technology enterprises rising more than 20 per cent.
BOC, meanwhile, increased its exposure to manufacturing and strategic emerging industries, with outstanding manufacturing loans up 5 per cent from the end of last year, reflecting Beijing’s push to build a more self-reliant industrial base.
The shift in credit allocation also highlights banks’ growing role in supporting policy priorities, particularly as China seeks to offset weakness in the property sector and revive domestic demand.
Global rating firm Moody’s Ratings on Tuesday revised the outlook of eight major Chinese banks, including the Big Four lenders, from “negative” to “stable”, while maintaining its A1 rating on the banks.
The agency said the outlook change reflected expectations that the country’s economic and fiscal strength would remain resilient despite domestic and geopolitical challenges.
It added that these major commercial banks were expected to continue to benefit from a “very high” likelihood of government support, according to a Tuesday report.


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China’s Big Four banks post stronger earnings as policy lending lifts growth

China’s largest state-owned banks delivered stronger-than-expected first-quarter earnings. Photo: Shutterstock Images


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Strong loan growth to infrastructure and policy-backed sectors helps lift profits, while margins show early signs of stabilising


Strong loan growth to infrastructure and policy-backed sectors helps lift profits, while margins show early signs of stabilising.


China’s Big Four banks post stronger earnings as policy lending lifts growth

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Strong loan growth to infrastructure and policy-backed sectors helps lift profits, while margins show early signs of stabilising

Strong loan growth to infrastructure and policy-backed sectors helps lift profits, while margins show early signs of stabilising