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China’s AgBank posts 14% third-quarter profit increase -Breaking

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© Reuters. FILE PHOTO – A sign for Agricultural Bank of China can be seen in Beijing’s office building on March 29, 2021. REUTERS/Tingshu Wang

BEIJING/SHANGHAI – Agricultural Bank of China Ltd. (OTC:) Ltd. (AgBank) saw a 14% jump in profit for the third quarter, as banks recover steadily from the COVID-19 Pandemic.

According to an exchange filing, net profit rose by 64.4 billion yuan (or $10.07 billion) from 56.5 million a year ago.

According to the bank, the non-performing loan ratio was 1.8% at the quarter’s end. This is a decrease of 1.5% from the quarter before.

At the end the third quarter, net interest margin was 2.12%. It is a key indicator for bank profitability. The level at the quarter’s second quarter ended was the same.

Bank of China, which is one of China’s four largest state lenders, stated that China’s commercial banks will likely post 3% quarterly profit growth in the June to September quarter. This is a sign of a slow recovery from the pandemic.

The worst performance of big state lenders was recorded in their first half. This happened because the coronavirus epidemic began last year. They did manage to get a slight profit rise for 2020, and then stabilized further over the next two quarters.

The Bank of China reports that the sector is still likely to be affected by falling loan rates, increased loan-loss provisions and other challenges facing non-interest-earning businesses.

The sector regulator stated that China’s banks saw their bad-loan rate rise to 1.87% by September, compared with 1.86% just three months prior as the effects of the pandemic continued.

China’s largest banks won’t give details of their lending history to the property industry in third quarter reports. However, fears about contagion from defaults by China Evergrande Group and other banks have increased and some shadow banks and insurers stopped providing new credit for property developers.

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