China’s Mega Banks Face New Challenges After Comeback Year

(Bloomberg) — China’s mega lenders, led by Industrial & Commercial Bank of China Ltd. (ICBC), delivered double-digit profit gains last year as business bounced back, but now face mounting challenges from the debt-plagued property sector and a growing Covid outbreak in the world’s second-largest economy.

China’s $54 trillion banking sector staged a recovery after policy makers moved to stabilize economic growth and loosened lending restrictions in the second year of the pandemic. ICBC, the world’s largest bank, saw profit rise 10.3% last year, the most in almost a decade. The other big lenders — China Construction Bank Corp., Bank of China Ltd., Bank of Communications Co. Ltd. and Agricultural Bank of China Ltd. — all reported their fastest annual profit growth since at least 2013.