CCB's Profit Rises as Lenders Issue More Loans to Meet Real Estate Demand
Yicai Global
/SOURCE : Yicai
CCB's Profit Rises as Lenders Issue More Loans to Meet Real Estate Demand

(Yicai Global) Aug 26 -- Net profit at China Construction Bank Corp. [SHA:601939], one of the country's largest state-owned lenders, rose 1.25 percent in the first half as China's property market grew rapidly in the first half, banks vigorously developed their mortgage businesses, leading to a sharp increase in home loans.

Individual home mortgage loans rose CNY3.18 billion at CCB as of the end of the first half, up CNY4.07 billion or 14.7 percent from the end of last year, putting the bank ahead of its peers in terms of both outstanding loans and new loans.

The bank's net profit grew 1.25 percent year-on-year to CNY13.3 billion in the six months through June. However, their non-performing loan ratio was 1.63 percent, up 0.05 percentage points from a year ago.

Against the background of intensified competition due to interest-rate marketization, its interest income fell 9.83 percent year-on-year to CNY34.64 billion in the first half as narrowing interest spread weighed on the bank's performance.

As China's economy slows, many industries are facing operating difficulties. Banks' bad loans have also become a market focus. As of the end of June, non-performing loans at CCB stood at CNY18.19 billion, up CNY15.97 billion from the end of last year. The non-performing loan ratio was 1.63 percent, up 0.05 percentage points year-on-year.

Loans at risk of default accounted for 3.06 percent of its total loans, up 0.17 percentage points from the end of last year.

In terms of industry-wide distribution of bad loans, the highest amount of non-performing loans was in wholesale and retail, manufacturing and mining, with an NPL ratio of 9.29 percent, 6.22 percent and 5.45 percent, respectively.

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