China's big four banks hit double-digit net interest income growth

BOC registered the biggest growth at 16.1% in Q3.

The Big-4 banks - ICBC, CCB, ABC and BOC - achieved double-digit growth in net interest income of 13.8%, 10.2%, 13.9% and 16.1% yoy respectively, aided by NIM expansion of 6-12bp yoy. UOB Kay Hian said BoCom’s net interest income was stagnant at (US$4.8b) Rmb32.1b as its NIM was compressed by a hefty 22bp yoy due to its heavy reliance on funding from the interbank market with net interbank liabilities-tototal liabilities at 17.4%.

Here's more from UOB Kay Hian:

NIM expansion due to optimisation of loan mix. ICBC, CCB and ABC have reduced low-margin discounted bills by 59.3%, 79.8% and 70.2% yoy respectively so as to expand corporate and personal loans. CCB achieved robust NIM expansion of 5bp qoq, compared with flat qoq NIMs for most of its peers.

We note the stronger deposit franchise at CCB and ABC with demand deposits expanding 12.9% and 13.9% yoy respectively. Their CASA ratios improved by 2.6ppt and 2.4ppt yoy to 55.3% and 57.1% respectively.

Fee income affected by regulatory headwinds. Fees were soft due to seasonality and the regulatory crackdown on wealth management products (WMP) and bancassurance. Fee income for ICBC and ABC fell 3.3% and 28.9% yoy respectively.