China’s banks were sitting pretty in the first quarter thanks to revenues and a reduction in corporate income tax to 25% from 33%, which came on January 1.
The gains came in spite of government efforts to rein in bank lending.
Bank of China saw its first quarter net profit jump 85% year-on-year to US$3.1 billion. Net interest income was up 19% to US$5.8 billion, while net fee and commission income rose 83% to US$1.3 billion.
Industrial and Commercial Bank of China saw a similar surge in its fee-based business, which was up 86% year-on-year to US$1.73 billion. Net interest income came to US$4.7 billion, up 36%. Overall first-quarter net profit was US$4.7 billion, a gain of 77%.
Bank of Communications’ s profit more than doubled to reach US$1.13 billion, while Agricultural Bank of China (ABC) posted a profit of US$4.9 billion, up 71%. There were also rumors of a management shakeup at the bank.
Banking services also proved to be a boon to Ping An Insurance, helping the firm offset a 34.5% drop in investment income to post a net profit of US$1.01 billion, a year-on-year gain of 23.6%. Ping An’s banking business contributed US$238.92 million in interest income, nearly double the previous year.
China Life Insurance, meanwhile, saw net profit drop by 61% in the first quarter to US$495.2 million, mostly due to stock market losses. The insurer’s investment income was down 9.9% as US$786 million was wiped from its investment portfolio.