By Dow Jones
The results from China's third-largest lender by assets echoed those from two other major state-run Chinese banks in recent days, reflecting a slowdown of growth in the world's second-largest economy as well as gradual efforts by Beijing to overhaul the banking sector. Both Bank of China Ltd. and Bank of Communications Co. also reported slower profit growth and increases of soured loans in their first-half earnings reports over the past week.
AgBank said Tuesday that its net profit for the six months ended June 30 rose 13% from a year earlier to 104. 03 billion yuan ($16. 8 billion), mainly driven by strong growth in net interest income, or revenue mainly from its lending business.
That was higher than 103. 59 billion yuan median forecast of six analysts polled earlier by The Wall Street Journal. "The bank's profit growth was in line with current economic situations," Zhang Yun, AgBank president, said on the sidelines of a briefing. "We are satisfied with the overall result," he added.
Analysts and investors widely expect bad-loan levels at Chinese banks to creep upward as China's growth slows, which could threaten borrowers' ability to repay debts. China posted 7. 4% economic growth in the first half of the year, below last year's 7. 7% growth rate.
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