By Ziyi Tang and Engen Tham
BEIJING/SHANGHAI (Reuters) – Bank of China beat forecasts on Wednesday with a 2.6% rise in 2024 net profit, thanks to growth in trading gains and falling impairment losses, though asset quality and margin pressures persist.
Profit climbed to 237.84 billion yuan ($32.74 billion) from 231.90 billion yuan in 2023, the nation’s fourth-largest state-owned bank by assets said in its annual results filing.
That was above a median estimate from 13 analysts of 221.47 billion yuan, according to data from LSEG.
The bank’s net interest margin (NIM) – a key gauge of profitability – was 1.40% at the end of last year versus 1.41% at the end of September.
The NIM at China’s commercial banks fell to a record low of 1.52% by the end of last year after the government in September unveiled a stimulus package including cuts to policy rates and mortgage rates.
“We will continue to prioritize the management of net interest margins in a low-interest environment and reasonably control the magnitude of changes,” the bank’s president, Zhang Hui, said at a press conference following the results’ publication.
Banks have been nudged to boost lending to the private economy and technology sector this year as part of the government’s efforts to revive the world’s second-largest economy as China braces for further U.S. tariffs.
China’s Bank of Communications Co Ltd last week reported a milder 0.9% rise in its net profit last year.
“In 2025, the external environment will face heightened uncertainty with multiple risks and challenges,” BoC said in the filing. “Global economic growth momentum is expected to remain weak.”
“Domestically, macroeconomic policies will become more proactive and effective,” the bank said, adding that it would continue to fulfill its responsibility as a state lender to serve the real economy.
The bank’s non-performing loan ratio was 1.25% at the end of last year versus 1.26% at the end of September, according to the filing.
“Bad loans from personal business loan and mortgage businesses went up,” said the bank’s vice president Wu Jian, adding that asset quality pressure persists.
($1 = 7.2638 Chinese yuan renminbi)
(Reporting by Ziyi Tang and Engen Tham. Editing by Jan Harvey, Mark Potter and Joe Bavier)
