Top 3 Chinese banks report double digit earnings growth

Growth rate will keep slowing as margins ease, however.

Industrial and Commercial Bank of China Ltd, China Construction Bank Corporation and Agricultural Bank of China Ltd, three of China’s big Four state-owned banks reported earnings analysts' expectations with fee and commission income counterbalancing weakening margins.

ICBC said it made a net profit of US$11.1 billion from January to March, up 19.4% year-on-year. AgBank said its net profit for the period was US$7.6 billion, 22% higher than the same period in 2012.

CCB said its first quarter net profit rose to US$9.7 billion, a 16% rise from a year ago.

The figures, however, reflects the banks’ weak performance in 2012. Most of their fee and commission income was largely flat as the Chinese government tightened regulations in response to criticism of indiscriminate charging for services that are usually free in other markets, such as changing an internet banking password.

The banks said their fee growth is largely driven by their investment banking and credit cards. Analysts expect their growth rates to slow, but double digits should still be attainable.