Net profit of China's big five State-owned commercial banks grew by less than 2 percent in the first quarter, due to economic slowdown and rising non-performing loans. [Photo/IC]

Net profit of China's big five State-owned commercial banks grew by less than 2 percent in the first quarter, due to economic slowdown and rising non-performing loans.

Industrial and Commercial Bank of China, the nation's biggest lender by asset, reported on Wednesday a 1.4 percent year-on-year increase in its first-quarter net profit to 74.3 billion yuan ($ 12 billion). The growth was well below the 6.6 percent increase ICBC recorded same period in 2014.

The bank's non-performing loans rose 1.29 percent by the end of March, up from 1.13 percent three months earlier.

The country's second-largest lender, China Construction Bank reported a 1.9 percent growth in its first-quarter net profit to 67 billion yuan. The bank also saw non-performing loans increase by 0.11 percentage points to 1.3 percent.

"Incrementally, we are reducing exposure to banks and non-bank financials," said Nomura in a note of equity strategy in the second quarter.

The financial group projects GDP growth to slow down to 6.6 percent year-on-year in the quarter ending June, and to 6.8 percent for the full year.

The non-performing loan ratio at Bank of China climbed to 1.33 percent in the first quarter, up from 1.18 percent. The bank reported a quarterly net profit of 45.8 billion yuan, up from 45.4 billion yuan, but with a far slower growth compared to same period last year's 14.3 percent increase.

Agricultural Bank of China earlier reported a net profit growth of 1.3 percent to 54.3 billion yuan in the first quarter and Bank of Communications of 1.5 percent to 19 billion yuan. The two banks saw their non-performing loan ratios rise by 0.11 and 0.05 percentage points to 1.65 and 1.3 percent respectively.