Financial lenders account for half of all listed companies' profits

A few listed banks' profits last year accounted for about half of the combined earnings of all public companies in China, adding weight to the assertion that the banking industry enjoys windfall profits.

According to the financial data provider Wind Information Co Ltd, 12 out of the 16 public banks that have published their 2011 results earned 841.5 billion yuan ($133.3 billion) in profits that year. That made up 51.3 percent of the total profits reported by the 1,336 Chinese public companies that had released their 2011 annual statements by Wednesday.

About 2,300 companies are listed in China. Among those, most of the big-cap companies - those with a large market valuation - have released their results.

The data about banking profits incited even more public anger over the advantages enjoyed by some of the country's biggest institutions.

Much of the complaints arose in response to the low deposits rates that many think banks offer and the excessive fees that they charge. The frustrations have become stronger in recent weeks, a time that has seen lenders post record profits even as the economy slows and some companies struggle to obtain credit.

Earlier this week, Premier Wen Jiabao said State-owned banks can too easily make profits and that officials have agreed that those institutions' grip on the market should be loosened.

The nation's five biggest State-owned banks - Industrial and Commercial Bank of China Ltd, Bank of China Ltd, China Construction Bank Corp, Agricultural Bank of China Ltd and Bank of Communications Ltd - made about 1.3 trillion yuan in interest income in 2011. That constituted about 80 percent of the total interest income made by the 12 listed banks that have published 2011 results so far, Wind Information said.

The banking industry made more than 1 trillion yuan in profit 2011, up 36.3 percent year-on-year, according to the China Banking Regulatory Commission. That was equal to one-fifth of the total profits made by Chinese industrial companies and one-seventh of the increase in the country's GDP during the same period.

Even so, the money did not go far to benefit bank investors.

An A-share index that tracks listed banks increased by just 2.35 percent in the first quarter of 2012, while the CSI 300 index, which tracks the biggest A-share stocks measured by market capitalization, went up by 4.14 percent in the same period.

Lenders are also less generous with dividends, despite the increases in their profits. Agricultural Bank of China, for example, plans to pay out 42.7 billion yuan in dividends, accounting for 35 percent of its profit. That proportion was 52.3 percent last year.

On Thursday, the CSI 300 index increased by 2.36 percent to 2,512.83 points after the China Securities Regulatory Commission raised the maximum amount that qualified foreign institutional investors are allowed to invest into China's capital markets, increasing it by $50 billion.

The new limit - set at $80 billion - is nearly equal to the amount of money that was raised through initial public offerings in China last year.

gaochangxin@chinadaily.com.cn