Shares of China’s major state-owned banks climbed on Monday following strong third-quarter earnings reports. The results showed improving profitability as pressure on net interest margins eased, deposit costs declined and asset quality remained stable.
Hong Kong-listed shares of Industrial and Commercial Bank of China rose as much as 3.6% by 02:35 GMT. The world’s largest lender by assets reported a 10% increase in third-quarter net profit on Friday.
Agricultural Bank of China gained as much as 2% after reporting 10.8% profit growth, while China Construction Bank’s Shanghai-listed shares advanced up to 2.3% following a 9.8% increase in profit.
Bank of Communications reported profit growth of 10.1%. Bank of China posted a more modest 6.4% rise.
The banks benefited from repricing higher-cost deposits, monetary support and mortgage interest subsidies. Gains from bond investments also contributed to earnings.
Despite the improved results, the sector continues to face weak credit demand, a slowing economy and emerging risks linked to lending to technology companies.
Sources: Investing.com News.