Banks set to reveal a slowdown in profits

A stockmarket rout is set to add to the losses of China’s banks, already grappling with slowing profit growth from a surge in bad loans and a series of interest rate cuts, by curbing robust growth in their fee-generating business.

The nation’s five biggest lenders are expected to report higher non-performing loans and smaller profit growth from their core lending business when they announce interim results this week, led by Industrial & Commercial Bank of China today.

China cut interest rates and reduced the amount of reserves banks must hold for the second time in two months on Tuesday, lowering the one-year benchmark lending rate by 25 basis points to 4.6%.