China Construction Bank Corp said third-quarter net profit was up 11.6 percent year-on-year at 176.9 billion yuan ($29 billion), but the growth rate slowed by 1.07 percentage points compared with the first half.

CCB released its figures on Sunday, making it the first of the top five banks to report.

"The increase in net profits falls within expectations," said Hu Jiye, a finance professor at the China University of Political Science and Law. "However, a lot of off-balance sheet businesses weren't included in the statement.

"If these businesses were counted, the results might not look so good," he said.

China Construction Bank Corp employees sit at a loan booth at an auto expo in Changsha, Hunan province. Provided to China Daily

"The overall net profit growth rate of the Chinese banking industry this year is estimated at 10 to 15 percent," said Guo Tianyong, professor at the Central University of Finance and Economics.

"State-owned banks' rates will be below the average, while joint-stock and private-sector banks will grow faster.

"Banks' growth rates are coming back down to earth after explosive expansion in the past few years. They will eventually drop to slightly above the GDP growth rate," Guo added.

CCB's nonperforming loans totaled 82.1 billion yuan, up 7.5 billion yuan from end-2012. The NPL rate, however, dropped 0.01 percentage point to 0.98 percent.

The quarterly growth rate of NPLs decelerated to 2.2 percent, compared with 4.2 percent and 3.3 percent in the first and second quarters, respectively.

The drop in the NPL growth rate indicates that the situation in Zhejiang and Jiangsu provinces, where there's been a high rate of sourced loans, has been brought under control, said a report by Pingan Securities Co Ltd.

The net interest margin was 2.71 percent, unchanged from the half-year year report.

"The average net interest margin in the banking industry is about 2.5 percent," said Guo, "It is expected to drop below 2 percent in the long run as interest-rate reform proceeds."

Interbank deposits were down 307.6 billion yuan from June 30, a decline of 41 percent.

Newly issued wealth management products were taken into the balance sheet, partly offsetting the decrease in interbank deposits.

New loans in the third quarter expanded 3.5 percent from the second quarter.

The proportion of high-yielding loans increased to 54.5 percent from 53 percent in the second quarter.

However, as loan and deposit interest rates are still being readjusted, the rate of return on interest-bearing assets hasn't increased remarkably, according to Pingan Securities.

The other four largest banks - Bank of China Ltd, Agricultural Bank of China Ltd, Industrial and Commercial Bank of China Ltd and Bank of Communications Co Ltd - are scheduled to release their third-quarter statements within this week.

China Galaxy Securities Co Ltd has estimated that the average net-profit growth rate for the top five banks will be 11.4 percent.

yangziman@chinadaily.com.cn

(China Daily USA10/29/2013 page16)