China Construction Bank Reports Zero Profit Growth Owing to Weak Country Economy
Published By : 31 Aug 2015 | Published By : QYRESEARCH
Amid the economic depression that has grappled China’s economy for the past couple of months, another member has joined the group of banks who have scored zero profit growth and a rise in their portfolio of bad loans – China Construction Bank Corp.
China Construction Bank Corp. is the second largest bank of the country. The bank has recorded zero profits and a rise in bad loans over the duration of three months through the 30th of June this year. The key factor leading to this considered to be the government’s struggles and failure at propping up the dwindling economy.
The bank reported that its net income for the aforementioned period (three months through 30th of June) was 64.9 billion yuan (nearly US$10 billion). This is nearly the same amount of income earned by the bank a year earlier, based on exchange filing made by the bank on Sunday.
Construction Bank was the last of China’s biggest lenders to report the profits for the second quarter of the year. Agriculture Bank of China Ltd. reported a decline in earnings of a 0.8 per cent and Industrial and Commercial Bank of China Ltd. reported profits that were little changed than that of the earlier year.
The issue of overcapacity and overproduction in many industries, piling-up corporate loans and a slump in stock market worth nearly US$5 trillion are collectively making it increasingly difficult for the country’s Premier in preventing the country from a deeper economic depression. The combined profits of the four topmost banks of China are expected to rise by a mere 2 per cent this year, which will be the least growth observed by these banks since 2004.
Construction Bank has also noted that its nonperforming loans increased by 28 per cent in the past six months’ duration to nearly 144.4 billion yuan as of the 30th of June.