Debt crackdown on China Construction Bank profits lifted

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China Construction Bank, one of the country's "big four" financial institutions, reported a moderate first-half profit rise and improving asset quality as a government crackdown on bad debt kicked in.

The bank's earnings were posted Wednesday night, hours after China's three other big state-owned lenders announced similar results for January-June, which they credited to the deleveraging campaign and stabilizing economic fundamentals.

China Construction Bank (CCB) earned a profit of 138.34 billion yuan (21 billion US dollars) in the first half, up 3.7% year-on-year, it said in a statement to the Hong Kong stock exchange, where it is listed.

That marks a slight improvement on the 1.1% increase reported in the first half of 2016.

CCB added that its non-performing loans (NPL) ratio was 1.51% in the period, down from 1.52% in the second half of 2016, and 1.58% in the six months before that.

China's banks, which have generally reported flat results in recent years, have benefited this year from faster-than-expected 6.9% economic growth in the first half.

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They have said bottom lines were further bolstered by the government campaign launched earlier this year to cut mounting debt and dispose of bad loans.

CCB said it reviewed and tightened up its lending policies and "continuously enhanced its credit structure" during the period.

"In the first half of the year, the banking industry was overall stable with a more reasonable growth rate of assets, and the risks were within control," CCB said.

While noting a "complex and grim business environment" worldwide, the bank expressed optimism for the future, saying the Chinese and global economies were expected to strengthen.

Bank of China, Industrial and Commercial Bank of China, and Agricultural Bank of China reported similar net profit gains and improved asset quality for the first half.

Shares in major Chinese financial institutions have climbed in recent weeks on improving sentiment.

However, China Construction Bank dipped 2.14% in Hong Kong and 1.42% in Shanghai on Thursday morning, roughly in line with shares of the other three lenders.

Source(s): AFP