H1 profit growth slows to a crawl at two of China's largest banks

Profit for the year’s first half at Industrial and Commercial Bank of China (1398.HKG, 601398.SHA) grew only 0.7% to RMB149.4 billion (US$23.38), while profit at Agricultural Bank of China (1288.HKG, 601288.SHA) for the period was up just 0.5% to RMB104.3 billion, South China Morning Post reported. The banks, which are the first of China’s big four state-owned commercial lenders to report interim earnings this year, suggested its banking sector is coming under increasing pressure from the country’s cooling economy. Asset quality also deteriorated at ABC, where the non-performing loan ratio hit a sector high of 1.83%; ICBC’s grew to 1.4%. ICBC’s net interest margin, a gauge of loan profitability, dropped significantly to 2.53% from 2.66% at the end of 2014.