Zhang Yu

JeniZhang13@163.com

CHINESE listed banks are facing tougher challenges in profitability and credit quality as the impact of the COVID-19 pandemic gathers pace, accounting firm PwC said in a report recently.

China’s listed banks achieved a net profit of 901 billion yuan (US$132 billion) in the first half of 2020, a year-on-year decrease of 9.05 percent, marking the first overall negative growth on record.

Amid the complicated economic situation, Chinese listed banks have increased provisions to strengthen their risk reserves, said the report, which analyzed the 2020 interim reports of 52 listed banks, with a sample size equivalent to 82.6 percent of the total assets and 87.8 percent of the net profit of Chinese commercial banks.

Affected by the COVID-19 pandemic, the fee reduction and concession policy implementation, the overall net fee and commission income growth of listed banks slowed down year on year.

The assets and liabilities of listed banks have grown rapidly under a moderately loosened monetary policy environment, according to the report. As of the end of June 2020, the growth rates of total assets and total liabilities of these banks were 7.65 percent and 7.74 percent, respectively, which were higher than those in the same period last year and amounted to 212.71 trillion yuan and 195.95 trillion yuan, respectively.

In terms of asset quality, as of the end of June 2020, the nonperforming rate of listed banks has rebounded significantly, and the overdue rate has remained relatively stable.