Beijing: China's state-owned banks, some of which climbed up to the top ranks of the global banking network, are feeling the pinch of the slowdown of the world's second largest economy as their profits grew at weakest rate in years.
Profit growth for China's five biggest banks slowed to single digits last year, with net profit in Agricultural Bank of China (ABC) up 8 percent, its first single-digit profit rise after an expansion of 14.52 percent in 2013.
Net profit of the Industrial and Commercial Bank of China (ICBC), which is among the largest banks in the world, fell from 10.17 percent in 2013 to 5.07 percent last year.
China Construction Bank, listed as one of the top ten banks in the world, registered a profit 6.1 percent against 11.11 percent in 2013.
Profits of other banks like Bank of China, as well as Bank of Communications dropped to 8.22 percent and 5.72 percent in 2014, respectively from 12.35 percent and 6.82 percent registered in 2013, the Money Weekly reported.
Combined net profits of the five banks reached 927.09 billion yuan (USD 151.24 billion) in 2014, close to 60 percent of that made by the entire industry.
Meanwhile, bad loans were on the rise, with non-performing loans (NPL) at the five banks all exceeding one percent, which will remain a challenge for the industry in 2015, the report said.
NPL ratio of China's entire banking industry rose to 1.64 percent as of the end of last year as economic growth slowed and some local governments and companies grappled with debt problems.
Chinese economy slowed down to 7.4 percent last year, the slowest in 24 years with projections to go down below seven percent this year and the next.
The magazine cited Song Xianping, head of risk control with ABC, as saying an average NPL ratio of between two and three percent would be an industry trend as the Chinese economy enters a "new normal" of slower growth.
