Chinese banks gain up to 10% in net profit in Q1

State-controlled banks are set to report 5-10% growth in Q1 net profit. Analysts said the year-on-year earnings growth of Chinese banks is due to a record level of loans and supportive measures by the central bank that minimised the impact of the country’s slowing economy. The state-owned banks set to report earnings include Bank of China, China Construction Bank, the Industrial and Commercial Bank of China, Bank of Communications, Agricultural Bank of China, and Postal Savings Bank of China. The People’s Bank of China (PBOC) cut the reserve requirement ratio by 50 basis points in December lowering that ratio for major commercial banks to 8.4%. The move reduced the cost of funding for banks by CNY15bn per year as it released CNY1.2tr worth of long-term liquidity into the interbank system.