Profit growth slows for China's top 10 banks

China's top 10 listed banks saw sharply-slowing net profits in the first half of the year as bad loans increased, a latest report by PwC showed. The top ten listed banks reported 513.2 billion yuan (81.5 billion U.S. dollars) of net profits during the first half, up 17 percent year on year. However, the growth rate dropped from the 34-percent growth in the same period last year. The report attributed the slowing profit growth to the central bank cutting interest rates twice this year, coupled with widening the interest rate bandwidth for loans and deposits. A new rule by the People's Bank of China, the central bank, allows financial institutions to set the maximum limit for deposits' interest rate at 1.1 times the benchmark, while the minimum limit for loans' interest rate at 70 percent of the benchmark. The report also attributed financial authorities' stringent review of the banks' service charges and innovative treasury products as another cause for the slowing growth of profits. The top ten banks include state-owned commercial banks such as the Industrial and Commercial Bank of China and joint-stock commercial banks, including the China Merchants Bank and the China CITIC Bank. The ten banks' total assets reached 76 trillion yuan as of the end of June, up 10.68 percent from the end of last year. The assets accounted for 77 percent of the nation's banking sector. Meanwhile, the ten banks' total non-performing loans rose to 356.7 billion yuan as of the end of June, increasing by 5.3 billion yuan from the end of last year. However, their average non-performing loan ratio was down 0.02 percentage point to 0.78 percent, the report said.