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Companies

Chinese banks cautious on bad loans despite bumper profits

Prudent stance compares with analyst and investor confidence for turnaround

Pedestrians stroll along the Bund in Shanghai on March 4 with the Lujiazui financial district in Pudong in the background. China's largest banks have posted their biggest surge in quarterly profit in at least a decade but remain concerned about increases in bad debt.   © Reuters

HONG KONG -- China's largest banks, after posting their biggest surge in quarterly profit since the aftermath of the global financial crisis, are not yet ready to declare an end to bad debt increases.

As growth in the world's second-largest economy accelerates out of the pandemic, investors and analysts have called a multiyear turnaround in profits after a slump in the first nine months of 2020, the worst since the banks were listed more than a decade ago. However, senior management at the banks, including Bank of China and Industrial & Commercial Bank of China, warn of central bank tapering and the expiry of support measures to small businesses.

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