The transcript is here! The four major banks earned an average of 3.3 billion yuan per day in the first half of the year

As of the evening of the 30th, all four major banks in China have announced their mid-term performance for 2023.

In the first half of the year, Industrial and Commercial Bank of China achieved a net profit of 174.7 billion yuan, a year-on-year increase of 1.1%; China Construction Bank achieved a net profit of 167.295 billion yuan, an increase of 3.12%; The net profit of Agricultural Bank of China was 133.234 billion yuan, an increase of 3.5%; Bank of China achieved a post tax profit of 120.95 billion yuan attributable to its shareholders, an increase of 0.78%. In the first half of the year, the four major banks made a total net profit of approximately 595.3 billion yuan, with an average daily profit of nearly 3.3 billion yuan.

At the mid-term performance press conference held consecutively, the management of the four major banks responded to hot issues such as credit allocation, asset quality, and adjustment of existing mortgage interest rates.

——How can credit allocation be strengthened?

As an important force in supporting China's stable growth, the four major banks continued to increase their credit allocation in the first half of the year. Taking Bank of China as an example, domestic RMB loans increased by 1.46 trillion yuan compared to the end of last year, setting a new historical high for the same period.

The manufacturing industry, strategic emerging industries, and other fields are receiving key "nurturing". Zhang Wenwu, Vice President of ICBC, revealed that as of the end of June, the balance of manufacturing loans in the bank exceeded 3.6 trillion yuan, with a growth rate far exceeding the average level of loans across the bank. The new loans will mainly be invested in key areas of the manufacturing power strategy, such as the new generation information technology industry, new energy vehicles, and high-end equipment.

In the first half of the year, the credit allocation of state-owned large banks did not decrease, but the data on social financing in China in July was weak, reflecting insufficient effective demand. Can credit disbursement maintain strong momentum in the second half of the year?

Agricultural Bank of China President Fu Wanjun believes that from a macro perspective, the performance of new RMB loans and social financing data in July was lower than market expectations, mainly due to the overdraft effect brought about by the implementation of monetary policy adjustments in June and short-term fluctuations caused by seasonal patterns. "Credit disbursement is a continuous process," he said. With the introduction of more stable growth policies, the Chinese economy will accelerate its recovery, and effective credit demand will further recover and increase.

Fu Wanjun mentioned that from the perspective of business practice, there is a strong demand in the fields of agriculture, rural areas, new energy, electric vehicles, science and technology innovation finance, and green and low-carbon areas in the county. It is necessary to timely identify and ensure financial supply.

——Can asset quality be stabilized?

In terms of asset quality, which has received much attention, the four major banks have generally remained stable, with non-performing loan ratios decreasing compared to the end or beginning of the previous year.

Looking ahead to the second half of the year, Wang Bing, Vice President of China Construction Bank, believes that asset quality is closely related to the development of the real economy and is also closely related to the bank's own risk management capabilities.

He specifically mentioned that as of the end of June, the non-performing loan ratio in the personal housing loan sector of China Construction Bank was 0.42%. Although it increased by 0.05 percentage points compared to the beginning of the year due to market conditions, the trend met expectations and did not have an impact on the overall stability of asset quality. For the existing non-performing assets, the bank will further strengthen its business philosophy and awareness, and continue to increase efforts to dispose of non-performing assets.

ICBC President Liao Lin analyzed that the current economic recovery in China is a process of wave like development and tortuous progress. Finance and the economy are closely intertwined, and there may also be fluctuations in some indicators in bank operations. The Chinese economy has strong resilience, great potential, and abundant vitality, and its long-term positive fundamentals have not changed. Especially with the gradual implementation and effectiveness of some macroeconomic policies, the economy is continuously improving, which will provide good support and favorable conditions for banks to improve their operations.

——How to adjust the interest rate of existing housing loans?

The Chinese financial regulatory authorities have previously clearly proposed to guide commercial banks to adjust the interest rates of existing personal housing loans in an orderly manner in accordance with the law, which has attracted the attention of all parties with every move of the four major banks.

Lin Li, Vice President of Agricultural Bank of China, stated that the above measures are beneficial for reducing the financial cost burden of some existing individual housing loan customers, and for commercial banks to smoothly repay loans in advance, which is conducive to stable operations. After the relevant policy plans are clarified, Agricultural Bank of China will quickly formulate specific operational rules, improve the contract text as soon as possible, accelerate system transformation and adjustment work, and actively carry out organizational implementation.

Liu Jiandong, the Risk Director of Bank of China, also responded that Bank of China will implement specific policy requirements for existing and incremental types of housing loans issued by the government in the future, and do a good job in serving individual customers.

It is worth noting that the current banking industry is generally facing the challenge of narrowing interest rate spreads. Will lowering the interest rate on existing housing loans further affect the profitability of banks?

CCB CFO Sheng Liurong admitted that this will have a certain impact on the bank's subsequent net interest margin level. He pointed out that maintaining a certain level of profit and net interest margin for commercial banks can help enhance the sustainability of supporting the real economy. China Construction Bank will optimize its asset liability structure; Vigorously developing retail credit; Enhance debt management capability and control debt costs; Strengthen loan pricing management. I hope to effectively control the decline in net interest margin through these measures.