Banking Newsletter - Review and outlook of China's banking industry for the first half of 2017

The Banking Newsletter, PwC’s analysis of China’s listed banks and the wider industry, is now in its 32nd edition. This analysis covers 39 A-share and/or H-share listed banks that have released their 2017 first half results. The total assets of these banks, as of 30 June 2017, accounted for 85.16% of the total assets of China’s commercial banking sector. Those banks are categorised into four groups as defined by the China Banking Regulatory Commission (CBRC):

The global economy presented a solid recovery in 1H 2017, as trade, investment and manufacturing activities gathered pace. China's economy was steady and recorded higher than expected GDP growth of 6.90% in the first six month of 2017. Financial regulators in China took further measures to control systemic risks in 1H 2017.

In 1H 2017, the aggregate net profit of China's listed banks were RMB 849.72 billion,  growing at a slightly slower rate of 4.50% as compared to the same period of 2016. The narrowing of net interest margins (NIM) and net interest spreads (NIS) weighted down listed banks’ profitability.

As of 30 June 2017, total assets of 39 listed banks increased by 4.21% from the end of 2016 to RMB 161.98 trillion. Total liabilities increased by 4.23% to RMB 150.66 trillion. Total assets and liabilities growth slowed.

Aa of 30 June 2017, the non-performing loans (NPLs) balances of 39 listed banks increased by 4.24% as compared to 31 December 2016, to over RMB 1.30 trillion. Both NPL ratios and special-mention loans ratios fell as compared to 31 December 2016, suggesting listed banks’ credit asset quality has entered a stable period.

As of 30 June 2017, apart from Joint-stock Commercial Banks, the capital adequacy ratios (CAR) for most listed banks fell.

In additional to banks' results analysis, this newsletter also featured articles on hot topics, such as banks and tech giants' stronger alliance, financial inclusion, and compliance risk for banks' overseas expansion. For more details please download the full report.

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Jimmy Leung
China Financial Services Leader
Tel: +[86] (21) 2323 3355

Margarita Ho
China Banking & Capital Markets Leader
Tel: +[852] 2289 1191

Richard Zhu
Tel: +[86] (10) 6533 2236

Vivian Ma
Tel: +[86] (21) 2323 3398

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