China’s five largest banks reported their biggest profit declines in at least a decade as they brace for further increases in bad loans in an economy weakened by the coronavirus pandemic.
The five lenders — Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China and Bank of Communications — released their latest financial report cards last week.
All five posted at least 10% year-on-year declines in profit for the first half of 2020 as they set aside more funds for potential loan losses in the coming months — much like many banks around the world.
“The banks have been asked to … perform ‘national service.’ They’ve been asked to support the economy at the expense of their own operational strength,” said Jason Tan, research analyst at CreditSights, told CNBC’s “Squawk Box Asia” on Monday.
