(Yicai) May 15 -- More than 80 percent of listed banks in China reported a rise in investment income in the first quarter of this year, with return on bonds becoming the main driving force. Listed lenders have turned to return on investment amid narrowing net interest margins.

Of the 42 listed Chinese banks, 36 saw growth in return on investment, with five posting an over 300 percent surge in their first-quarter returns from a year earlier, according to statistics from financial data provider Choice.

Xiamen Bank's return on investment jumped the most, reaching CNY280 million (USD38.7 million) in the three months ended March 31 compared with CNY43.4 million (USD6 million) a year ago. Such returns at Bank of Shanghai, Jiangsu Zijin Rural Commercial Bank, Bank of Ruifeng, and Bank of China soared 497, 401, 370, and 332 percent, respectively.

Twenty-three listed lenders, all urban commercial banks, reported that investment returns contributed more than half of the non-interest income.

Most banks attributed the jump in their first-quarter return on investment to additional bond allocation, Yicai learned. According to data from the financial reports of 31 lenders, their combined debt investment was CNY15.4 trillion (USD2.13 trillion), making up around 53 percent of financial investments.

In addition to bonds, some banks noted in their reports that their investment growth was relevant to buying fund products. However, most of the funds in which banks invested were bonds, according to insiders at several institutions.

Many factors need to be considered about whether banks' return on investment will continue to increase in the future, multiple market insiders pointed out.

Fast first-quarter growth in investment returns was largely due to the bullish bond market, analysts from banks noted. However, because of the more intensified fluctuations in the recent bond market, the impact of factors such as the macroeconomic conditions and changes in the market environment should be considered, they added.

It cannot be expected that some institutions in the market may experience increased profits and concentration of sales at some time, leading to liquidity risks, the analysis added.

Editor: Martin Kadiev