China’s stimulus plans are choking the profitability of its megabanks, analysts say
2024-11-08 09:34:15 source：CNBC
November 8, 2024
China’s largest state-owned banks are likely to see their record low profit margins decline even further as Beijing’s broader stimulus package comes into play, analysts say.
The net interest margins (NIM), a key proxy of bank profitability, at China’s “Big 4” lenders — Industrial and Commercial Bank of China (ICBC), China Construction Bank, Bank of China, Agricultural Bank of China — fell by an average of around 20 basis points in the first nine months of 2024 from a year ago, CreditSights analysts said in a report.
ICBC, the world’s largest lender by asset, was the only major lender among the Big 4 that reported a flat NIM in the third quarter compared to the previous quarter, at 1.43%. Still, that was 18 basis points lower from the beginning of this year.
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