Chinanews Client Beijing, August 31st (Reporter Li Jinlei) In the first half of this year, commercial banks made less money. This can be seen in the semi-annual reports of the four major banks.

Data map: Bank cash counter at work. Photo by Ai Qinglong

The net profit of the four major banks in the first half of the year fell by more than 10%

　　On August 30th, the four major banks, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, announced their first half performance on the same day.

　　Let’s take a look at ICBC, which is known as the "Universal Bank". The semi-annual report shows that ICBC’s net profit in the first half of the year was 149.796 billion yuan, a year-on-year decrease of 11.2%.

　　The ABC's net profit in the first half of the year was 109.19 billion yuan, a year-on-year decrease of 10.8%. The net profit of CCB in the first half of the year was 138.939 billion yuan, a year-on-year decrease of 10.77%. Bank of China's net profit in the first half of the year was 107.812 billion yuan, a year-on-year decrease of 11.22%.

　　It can be seen that although the net profits of the four major banks in the first half of the year were still at the level of 100 billion yuan or more, they all saw a double-digit decline, with a decline of more than 10%.

　　Although the total net profit of the four major banks in the first half of the year was 62.475 billion yuan less than the same period last year. However, on average, the four major banks earned an average of more than 2.7 billion yuan per day in the first half of the year, and their profitability is still leveraged. If you add Bank of Communications and China Postal Savings Bank, the six major banks earned an average of about 3.1 billion yuan a day in the first half of the year.

　　From the perspective of the entire banking industry, data from the China Banking and Insurance Regulatory Commission show that in the first half of 2020, commercial banks achieved a total of 1 trillion yuan in net profit, a year-on-year decrease of 9.4%, and the growth rate fell 15.86 percentage points from the same period last year. As a result, commercial banks earned 130 billion yuan less than the same period last year. In the first half of 2019, commercial banks achieved a cumulative net profit of 1.13 trillion yuan.

　　Why did the net profit of commercial banks drop sharply in the first half of the year? Where did the money go?

RMB data map. Photo by China News Agency reporter Zhang Hao

One is to concession to the real economy.

　　In accordance with the requirements of the executive meeting of the State Council, it is necessary to promote the financial system to give a reasonable profit of 1.5 trillion yuan to various enterprises throughout the year.

　　Wen Bin, chief researcher of China Minsheng Bank, told a reporter from Chinanews.com that China's economy is facing downward pressure due to the impact of the epidemic, and enterprises, especially small and medium-sized enterprises, are facing difficulties in operating. The state has proposed that financial institutions give 1.5 trillion yuan in profits to help enterprises overcome the difficulties.

　　Yi Gang, Governor of the People's Bank of China, said that the financial sector's transfer of profits to enterprises mainly consists of three parts. One is to reduce interest rates; the other is to promote the transfer of profits through direct monetary policy tools; and the third is to reduce the fees and charges of banks.

　　Wen Bin pointed out that lowering interest rates, reducing fees for intermediary services, and deferring loan repayment, although these measures have brought some pressure on bank profits, but in the medium and long term, they will help support the development of the real economy.

　　Dong Ximiao, chief researcher of China Merchants Union Finance, told a reporter from Chinanews.com that in the first half of the year, loan interest rates fell, bank asset yields fell, and deposit interest costs increased, squeezing net interest margins, and the net interest margins of several major banks were narrowing.

　　A comprehensive semi-annual report shows that the net interest margins of the six major banks have all declined. Among them, ICBC's net interest margin was 1.98%, a year-on-year decrease of 15 basis points. The net interest margin of China Construction Bank was 1.99%, a 13 basis point decrease year-on-year, a significant drop.

　　According to data from the China Banking and Insurance Regulatory Commission, financial institutions have given away more than 870 billion yuan to the real economy in the first seven months of this year.

　　Dong Ximiao said that banks give benefits to the real economy because only when the real economy develops can the development of the banking industry have a fundamental guarantee. Otherwise, it will be left behind?

　　Wen Bin also believes that banks' initiative to benefit the real economy will help to realize the symbiosis and co-prosperity of banks and the real economy. On the one hand, it supports the sustainable and restorative growth of the real economy, and the restorative growth of the real economy also helps banks to operate more soundly and securely.

RMB data map. Zhang Yunshe

The second is to increase the intensity of non-performing disposal and provisioning.

　　This is a "precautionary measure" for bad assets.

　　Data from the China Banking and Insurance Regulatory Commission showed that at the end of the second quarter of this year, the balance of non-performing loans of commercial banks was 2.74 trillion yuan, an increase of 124.3 billion yuan from the end of the previous quarter; the non-performing loan ratio of commercial banks was 1.94%, an increase of 0.03 percentage points from the end of the previous quarter.

　　Specific to the six major banks, as of the end of June, the non-performing loan ratios of Industrial and Commercial Bank, Construction Bank, Agricultural Bank, Bank of China, Bank of Communications, and Postal Savings Bank of China were 1.50%, 1.49%, 1.43%, 1.42%, 1.68%, 0.89%, respectively , Compared with the end of the first quarter.

　　Wen Bin pointed out that banks need to use part of their profits to write off existing non-performing loans, and due to the impact of the epidemic, the NPL ratio and the amount of non-performing loans are expected to rise in the next stage, so banks need to increase their allocations. Be prepared to deal with the pressure of potential non-performing loans.

　　A spokesperson for the China Banking and Insurance Regulatory Commission said a few days ago that in the first half of the year, banking financial institutions handled a total of 1.1 trillion yuan of non-performing loans, an increase of 168.9 billion yuan over the same period last year. At the same time, in accordance with the principle of expected credit losses, the provision for impairment was 1.3 trillion yuan, a year-on-year increase of 34.4%.

　　Dong Ximiao pointed out that the increase in the provision of provisions means that the banking industry has more ammunition to resist risks and lays a solid foundation for coping with the pressure of increasing non-performing assets. (Finish)