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UPDATE 1-China's AgBank sees slowing profit growth, higher bad loans in Q2
August 26, 2014 / 8:56 AM / in 3 years

UPDATE 1-China's AgBank sees slowing profit growth, higher bad loans in Q2

(Recasts, adds details of rising NPLs)

SHANGHAI/HONG KONG, Aug 26 (Reuters) - Agricultural Bank of China Ltd on Tuesday became the third major Chinese bank to report slowing profit growth and rising bad loans for the second quarter, as a slowing economy impacts lenders.

In the second quarter, AgBank made a net profit of 50.57 billion yuan, according to Reuters calculations based on company figures, a year-on year growth of 11 percent versus the 22 percent year-on-year growth rate in the same 2013 period.

The bank’s non-performing loan ratio increased to 1.24 percent at end-June compared to 1.22 percent at end-March, the highest among Chinese lenders that have reported second quarter earnings so far. AgBank is China’s third largest bank by assets.

AgBank joins Bank of China and Bank of Communications which reported a similar results this month.

In recent years, AgBank has been among the Chinese lenders hardest hit by rising bad loans as many of its assets are in rural areas which have been hard hit by the economic slowdown.

The bank’s capital adequacy rose slightly to 11.89 percent, compared to 11.87 percent at end-March.

AgBank’s shares have fallen 4.2 percent so far this year, underperforming many of its peers. The benchmark Hang Seng Index is up over 7 percent in the same period.

$1 = 6.1520 Chinese yuan Reporting By Engen Tham in SHANGHAI and Lawrence White in HONG KONG; Editing by Miral Fahmy

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