Agricultural Bank’s Q3 profit inches up 0.65pc, lifted by reduced costs, higher fee income

The Agricultural Bank of China said its net profit for the third quarter improved slightly year on year, as the bank managed to increase its fee income and reduce expenses, even as its lending businesses slowed.

Profit nudged up 0.65 per cent to 49.1 billion yuan during the three months through September from the year-earlier period, according to a filing.

Non-performing loans at were 2.39 per cent as of end September, little changed from its level of 2.4 per cent at the end of June. The banks said it has set aside cash reserves of about 173 per cent against the bad loans, which now amount to 229.8 billion yuan.

“Agbank’s NPL provision is very high. We are not especially concerned by that. The level of bad loans at Agbank has been high because it does more small and medium-sized enterprise and rural business. It has been reflecting the business performance where its branches are based,” said Shujin Chen, research director at DBS.

“Agbank’s pre-provision operating profits is weak this year because of the same reason,” Chen added.