Bank of China Ltd. more than doubled its money set aside for bad loans as profit growth cooled to the slowest pace in five quarters on weakness in the economy.
Provisions for potential soured debt climbed to 12.7 billion yuan ($2.1 billion) in the second quarter, up 116 percent from a year earlier, based on half-year figures released by the Beijing-based company yesterday. Net income rose 8.5 percent to 44.4 billion yuan, the earnings statement showed.
The nonperforming loans of China’s fourth-largest bank surged to 85.9 billion yuan, the highest in more than five years, as companies struggled with repayments in an economy at risk of the weakest full-year growth since 1990. The nation’s lenders are already trading at the cheapest price-to-earnings valuations of global banks.