China’s Big Banks Flatline on H1 Profit as Margin Squeeze Bites

China’s four largest state-owned lenders reported largely flat first-half earnings, underscoring the pressure a faltering economy and successive policy rate cuts are exerting on their lending margins. Industrial and Commercial Bank of China said January–June net profit slipped 1.4% from a year earlier to 168.10 billion yuan. China Construction Bank registered the same percentage decline to 162.08 billion yuan, while Bank of China’s profit eased 0.9% to 117.59 billion yuan. Agricultural Bank of China was the sole gainer, posting a 2.7% rise to 139.51 billion yuan. The results follow warnings from the so-called “big five” banks that net interest margins will remain under strain in the second half as weak loan demand and lower benchmark rates squeeze profitability. Sector-wide margins fell to a record-low 1.42% at end-June, below the 1.8% level regulators view as necessary for sustainable returns. Separately, electric-vehicle maker BYD Co. bucked the broader trend, logging a 13.8% jump in first-half net income to 15.51 billion yuan on revenue of 371.28 billion yuan. The Shenzhen-based company said gross margin held at 18% as record sales of battery-electric and plug-in hybrid models offset intensifying price competition in China’s auto market.