According to Reuters, some of China’s largest banks have stated that the country’s leaders are facing a number of challenges this year, including the pandemic, global politics, and domestic real estate upheaval.

Reuters reported that the Industrial and Commercial Bank of China (ICBC) warned that China deals with “shrinking demand, disturbed supply, and weakening expectations” in the annual report.

According to the report, ICBC’s net interest margin, a bank profitability measure, was 2.11% in 2021, while it was 2.15% in the previous year.
China Construction Bank (CCB) said on March 29 that the banking industry in China is facing “a more complicated and severe business environment.”

The bank issued the operating result report for the third quarter of 2021 in October. The company’s net interest margin was 2.12%, lower than the same period last year.

In addition, the Bank of China (BoC) said that the global epidemic would continue, the easing policies of developed economies would be withdrawn, and geopolitical conflicts would intensify.

Bloomberg reported on March 29 that the BoC’s non-performing loan ratio (loan with 90 days past due) fell to 1.33%. In the property sector, this ratio rose from 4.7 billion CNY ($739.6 million) to 34.7 billion CNY ($5.5 billion).

Meanwhile, Liu Jun, president of China’s Bank of Communication (BoCom), said it would be difficult to achieve satisfactory earnings this year.

Liu added that the challenges include the return of COVID in China, the crisis between Russia and Ukraine, and its impact on supply issues, inflation, and other domestic obstacles.

Reuters reported in another article that BoCom’s non-performing loan was 1.6% three months ago, while it was 1.48% by the end of 2021.

According to Reuters calculations, BoCom’s fourth-quarter net profit was 23.2 billion CNY ($3.65 billion), down from 25.6 billion CNY ($4 billion) a year earlier.

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