Net profit of commercial banks rise despite headwinds

China's commercial banks have sufficient capability to prevent and offset risks, despite a slowdown in their profit growth rate during the first quarter of the year, the National Financial Regulatory Administration said on Friday.

Net profit of the commercial banks over the period totaled 667.9 billion yuan ($95.17 billion), up 1.3 percent year-on-year, which was 6.1 percentage points lower than that in the same period last year, data from the administration showed.

Their average return on capital was 10.32 percent during the first three months of the year, while the average return on assets was 0.81 percent, the NFRA said. 

However, as of the end of the first quarter, the commercial banks' loan loss reserves stood at 6.4 trillion yuan, growing by 257.2 billion yuan compared to the end of 2022.

The provision coverage ratio---loan loss reserves compared with bad loans---was more than 205.24 percent, down 0.6 percentage points if compared with that in the end of 2022. Meanwhile, the loan provision ratio, or loan loss reserves compared with the outstanding loans, was 3.32 percent, down 0.04 percentage points.

Assets of China's financial institutions surged by 10.9 percent year-on-year to 397.3 trillion yuan as of the first quarter of the year, the NFRA said.

Major commercial banks accounted for 41.9 percent of the total figure, as their assets expanded 14 percent on a yearly basis to 166.4 trillion yuan.

Assets of joint-stock commercial banks rose 7.5 percent from a year ago to 68.9 trillion yuan, accounting for 17.3 percent of the national total.

liuzhihua@chinadaily.com.cn