(Yicai) Nov. 2 -- Chinese commercial banks' revenue dropped slightly in the first three quarters from the same period last year amid a sluggish economic recovery and their net interest margin, which is a key gauge of profit and growth, continues to narrow due to the lowering of benchmark interest rates and other measures taken to boost the real economy.

Revenue at 42 mainland listed banks dipped 0.8 percent between January and September from a year earlier to CNY4.3 trillion (USD589.5 billion), while net profit climbed 2.6 percent to CNY1.6 billion (USD218 million), according to financial data platform Wind. Both figures grew at a slower pace than in the first half of the year.

Lenders’ net interest margin between deposits and loans contracted 25 basis points over the period to 1.73 percent and continues to be a major drag on performance.

The benchmark lending rate, also known as the loan prime rate, has been lowered twice since the beginning of the year. The one-year LPR was cut by 10 bps in June and again in August to 3.45 percent, while the five-year LPR was trimmed by 10 bps in June to 4.2 percent.

On top of this, the central bank reduced the interest rate on existing mortgages on Sept. 25 to spur the real estate market. This will further squeeze banks’ net interest margin this quarter, several lenders said at their earnings calls.

Industrial and Commercial Bank of China maintained its leading position. Net profit climbed 0.8 percent to CNY268.7 billion (USD36.8 billion) in the nine months ended Sept. 30 from a year earlier, while revenue slumped 3.6 percent to CNY651.3 billion (USD89 billion).

Compared with state-owned big banks, the performance of urban commercial banks was quite good. Profit at Changshu Rural Commercial Bank in eastern Jiangsu province surged 21.1 percent year on year to CNY2.5 billion (USD342 million) while revenue jumped 12.6 percent to CNY7.5 billion (USD1 billion). It was the only lender to report double-digit growth in both revenue and profit.

Editors: Dou Shicong, Kim Taylor