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China wins again! : AgBank, BoC vie for $30 bln profits between themselves

National emblem of the People's Republic of China

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Even as analysts priced in the expected 12% default rate (NPLs), AgBank and BoC were the first to report results till September after reporting good first 2 quarters. Next in line are CCB and ICBC in this week. Today’s AgBank results showed a highly efficient 1.6% NPL ratio at the bank, down one seventh  as also BoC reported a 0.99% NPL improving 1 basis point of its NPL ratio. The Top 4 Chinese banks had reported 66% of the Top 16 listed banks’ $72 bln profit in H1. Earlier this month China Huijin started buying stakes in banks after its last purchases in 2006 pre IPO

AgBank assets hit a $1.8 Tln total of which SME and local loans grew at 12.7% in the third quarter, and overall loan growth clocked a good 10% It posted a 34 billion Yuan Quarterly profit ( @ $1=Yn 6.45) , adding up to a take of more than $15 bln at a 100 bln Yuan in 2011. NPLs are a low $13 bln of the assets. Loans are a $850 bln on deposts of $1.5 tln with its larger rural spread. For 2011, its incremental Loan Deposit Ratio is a better 65% than the 56% overall with Half a tln Yuan in new loans

ABC thus pipped BOC to become the new no. 3 in assets and profit, and also posted a NII of $34.64 bln for the 3 quarters growing 26% (Yn 223.4 bln) at a NIM of 2.69%(in Q3) and a fee income aggregate of Yn 54.8 bln or  $8.49 bln incl. Yn 18.33 bln (57% higher yoy ) in Q3

Shenzhen Development Bank

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In related moves on regulation CBRC continued to support PBOC in helping banks tackle the Local LSFs about to dent these profits

SHANGHAI, CHINA - MAY 20:  Liu Mingkang, chair...

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* Mutual funds had a third-quarter combined loss of 241 billion
yuan, China Securities Journal says, citing TX Investment
* Banks will be allowed to sell bonds to finance lending to
small companies, Shanghai Securities News says, citing the China
Banking Regulatory Commission(Bloomberg)

BoC fell behind in expected profits with a 29.8 bln Yuan score for the quarter. The $4.68bln profit still added to a $14.88 bln nine months of 2011 in Net Profits It rid itself to all GIPSI exposure during the month. As of September end it held 97 bln /Yuan worth Euro debt from 2007  It grew ata smaller 25% yoy pace in profits and assets as also fee income of Yn 15.8 bln against a Yn 18 bln by AgBank(ABC)   BOC NIM is 2.1%

BoC assets are a close 11.5 Tln Yuan or $1.8Tln Both compare favorably with US Bank balance sheets at Citi, BofA and Wells Fargo of arnd $2.2 Tln BOC reporteda NII of 167 bln Yuan and a Fee Income of 50.83 bln Yuan(EED) for the year till date in 2011 a 4 bln Yuan behind AgBank in agg income

CHENGDU, CHINA - JANUARY 7:  A person counts y...

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China Citic and Shenzen Development Bank are in the Top 10 that account for most of the country’s banking profits. Citic reported a NII of $1.6 bln beating estimates by 20% Ping An reported Szhenxen DEvelopment Bank as part and parcel of itself drawing profits down by Yn 1.95 bln to 14.5 bln after a growth of 25% yoy Ping An owns 52% of Shenzhen Development Bank after it injected 20 billion yuan into the lender in August, allowing the insurer to book the bank’s profit as a subsidiary.(WSJ)

PBOC may start turning bank rate policy upside down from June 2012, cut bank rates and also reduce reserve requirements for small and medium banks By then the Big 4 banks would have added recapitalisation and have started adding their Local LSF to the balance sheets As of now the Local LSFs that almost grew by 200 bln Yuan at AgBank are off balance sheet exposures at Chinese banks 3 year Auction yields have started coming down at Central bank auctions(Bloomberg)




4 comments on “China wins again! : AgBank, BoC vie for $30 bln profits between themselves

  1. Pingback: China wins again! ICBC stamps its leadership on the kingdom | The Banking and Strategy Initiative

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    November 21, 2011

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  3. Pingback: China in last phase of solving ongoing liquidity / solvency crisis | Advantage China | The Banking and Strategy Initiative

  4. Pingback: Chinese Banks pull in claws! AgBank 2011 results still up 29% | The Banking and Strategy Initiative

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