Beijing, Aug. 30 (BNA) The Industrial and Commercial Bank of China (601398.SS), the world’s largest commercial lender by assets, said that non-performing lending to the real estate sector in the first half of this year rose by 15%.
The bank reported 38.8 billion yuan of non-performing loans (NPL) at the end of June, compared with 33.8 billion yuan at the end of last year, according to a first-half earnings report on Tuesday.
According to Reuters, this means the real estate sector’s non-performing loan ratio is 5.47%, compared to the bank’s average of 1.41%.
The lender is the third-largest Chinese bank to report rising bad debts in the real estate sector, amid a dismal first half in which rising default rates for developers halted housing projects, leading to a mortgage boycott.
Despite this, Industrial and Commercial Bank of China net profit grew 4.9% year-on-year in the first half of this year.
Profits amounted to 171.5 billion yuan ($24.82 billion) in the six months to June, the bank said in a statement on Tuesday, compared with 163.47 billion yuan in the same period a year earlier.
Reuters calculations show that the data indicates a second-quarter net profit of 80.9 billion yuan, up 4% from a year earlier.
The bank said net interest margin – a key indicator of banks’ profitability – stood at 2.03% at the end of June, compared to 2.10% at the end of March.
It reported a non-performing loan ratio of 1.41% at the end of the second quarter compared to 1.42% at the end of the previous quarter.