by JIANG Yiman

Agricultural Bank of China (ABC) has overtaken Bank of America to become the world's second-largest lender by market capitalization, behind JPMorgan Chase, after a more than 50% surge in its shares this year.

ABC's Shanghai-listed stock closed at 8.06 yuan on Oct. 30, valuing the state-owned bank at 2.74 trillion yuan (about $387 billion). JPMorgan's market value stood at $850.8 billion.

The Beijing-based lender topped the Shanghai market by free-float capitalization in August, and by Sept. 4 its combined A- and H-share value had surpassed Industrial and Commercial Bank of China's, becoming China's most valuable lender.

In the third quarter, ABC's revenue rose 4.3% from a year earlier to 181 billion yuan, while net profit increased 3.7% to 81.4 billion yuan. For the first nine months, revenue climbed 1.9% to 550.8 billion yuan and profit 3.0% to 220.9 billion yuan. Net interest income fell 2.4% to 427.3 billion yuan as margins narrowed to 1.30%, reflecting sector-wide pressure from lower lending rates. Fee and commission income rose 13.3%, and investment income jumped 35.4%.

Total assets reached 48.1 trillion yuan by end-September, up 8.4% on the year. Loans grew 8.4% to 26.99 trillion yuan, including a 18.4% increase in manufacturing loans and more than 4.7 trillion yuan in technology lending.

Asset quality remained stable, with a non-performing loan ratio of 1.27% and a provision coverage ratio of 295%. Rural lending rose 10.6% to 11 trillion yuan, and deposits increased 7.2% to 14 trillion yuan.

Analysts said valuations remain reasonable. China Merchants Securities said ABC's price-to-book ratio of around 1.0 leaves room for re-rating given its strong capital buffer. China Galaxy Securities noted the bank's dividend yield above 3.2% offers steady income for long-term investors such as insurers and pension funds.