China’s AgBank Q1 profit falls 1.63% as loan margins shrink

AGRICULTURAL Bank of China (AgBank) reported a 1.63 per cent fall in first-quarter net profit on Monday (Apr 29), due to shrinking profitability amid sluggish loan demand.

Net profit for the three months ended March totalled 70.39 billion yuan (S$6.1 billion), compared with 71.55 billion yuan in the same period of 2023, AgBank said in a filing.

Chinese banks are confronting shrinking profitability as Beijing has urged state lenders to provide cheaper loans to boost the economy, while loan demand remains weak.

The bank’s net interest margin – a key gauge of profitability – was 1.44 per cent at the end of March, shrinking from 1.6 per cent at the end of last year.

The non-performing loan ratio was 1.32 per cent at the end of March, remaining steady from 1.33 per cent at the end of December 2023. REUTERS