Profits for A-share listed banks up 4.55% in Q1

A-share listed banks gained higher net profit in the first quarter from a year earlier, up by 4.55 percent, while their business income declined a lot last year compared with the pre-pandemic level, according to a report issued by the professional service company EY on Thursday.

In the first three months this year, 38 banks listed in the A-share market achieved total net profits of 519.944 billion yuan. In contrast, they faced greater operational pressure last year, realizing net profits of 1,761.6 billion yuan, only up by 0.1 percent year-on-year, the report indicated.

Due to the impact of the pandemic and other factors, the aggregate nonperforming loans of listed banks increased by 241.1 billion yuan in 2020, to 1,827.1 billion yuan as of the end of December.

The adverse impacts of the COVID-19 pandemic on the global economy, China-US trade frictions and financial market volatility have put listed banks through unprecedented stress tests. But the recent positive growth of net profits indicated that China's listed banks have successfully passed the stress test, said Effie Xin, managing partner of Greater China Financial Services at EY.

"In addition, we saw banks actively respond to the national pandemic prevention and containment policies and continue to provide favorable monetary policies for the real economy," said Xin.

EY's Partner of Financial Services Steven Xu said that the overdue loan ratio of listed banks decreased as they stepped up efforts in the disposal of NPLs and implemented the regulatory policies related to the fight against the pandemic.

The report also indicated that listed banks continued to promote retail banking transformation that acted as a new engine driving profit growth and made increasing contribution to their profits.

Listed banks have posted a more prominent result of the retail banking in 2020 as the business was less affected by the pandemic. The operating income from retail banking accounted for 42.33 percent of total operating, it said.