CHINA'S five biggest banks have posted record-high net profits for 2011, equal to a combined daily income of 1.87 billion yuan (US$297 million).

The gains, however, have come in for criticism with bankers accused of sitting on juicy profits amid unreasonable spread between lending and deposit rates, an online survey showed yesterday.

Total net profits at the top five lenders, the Industrial and Commercial Bank of China, China Construction Bank, the Agricultural Bank of China, the Bank of China and the Bank of Communications, surged to 680.85 billion yuan last year, according to calculations based on their earning reports. The lenders said profits were mainly driven by rising net interest incomes, as net interest margins widened, and also by growing income from fee-based services such as clearing, settlement and cash management.

Unprecedented public criticism has been accumulating on social networking websites since Hong Qi, president of China Minsheng Banking Corp, said last year: "We are embarrassed to announce as the banks' profits are too high."

Xinhua news agency launched a web-based survey about why the public is upset about banks' high profits. By 8pm yesterday, 3,681 netizens had participated, with 16 percent attributing the gains to unfair service charge and 10.7 percent saying the lenders are squeezing the profitability of the real economy. The majority of respondents criticized the unreasonable spread between lending and deposit rates.

Analysts said banks' profit growth may slow this year on narrowed interest margins as demand for loans weakens amid the economic slowdown.

Source:shanghaidaily