Two of China's biggest banks post nearly flat profit growth
Flat results at ICBC and Agricultural Bank of China likely because of credit costs on loans and present gloomy outlook for the sector
Profit growth at two of China's biggest lenders slowed in the first half as the banking sector came under increasing pressure from a cooling economy.
At Industrial and Commercial Bank of China, the world's largest lender by assets, profits were up just 0.7 per cent year on year to 149.4 billion yuan. Profit growth at Agricultural Bank of China edged up 0.5 per cent to 104.3 billion yuan.
The results for both banks fell under the consensus of analysts as credit costs on loans ate away at the spoils.
Asset quality also showed significant deterioration, with Agricultural Bank's non-performing loan ratio hitting a sector-wide high at 1.83 per cent at the end of June. The average is 1.5 per cent.
The results from the two banks, the first of China's "big four" national commercial lenders to report interim earnings this year, presented a gloomy outlook for the sector in general. Bank of China and China Construction Bank are expected to deliver earnings for the first half on Friday.
The growth rates for the first half raised questions with analysts over whether full-year results at a major Chinese lenders could fall below those of 2014.
