BEIJING - Earnings reports this week from Industrial & Commercial Bank of China Ltd, China Construction Bank Corp and Agricultural Bank of China Ltd showed that their provisions for losses on bad loans - or nonperforming loans - stabilized last year, helping them to post higher-than-estimated profits.

The lenders' nonperforming loan ratios either declined or, in ICBC's case, held steady, a sign that the banks benefited from a rebound late last year in the world's second-biggest economy. That's a welcome change for an industry that has been contending with narrower margins, as well as tighter regulations on mortgage lending and off-balance-sheet wealth-management products.

"We have started to see signs of stabilization and slight improvement in ICBC's asset quality," the bank's Chairman Yi Huiman said at a news conference in Beijing on Thursday. "I believe our asset quality will be better in 2017 than 2016. As the Chinese economy recovers, the external operating environment for banks is also improving."

His bank and its two rivals reported combined loan-loss provisions of 262.2 billion yuan ($38 billion) for 2016, little changed from the previous year, exchange filings show. That's a stark contrast to the 43 percent year-on-year increase in charges in 2015.

In the 2014-15 period, the lenders saw their bad-loan ratios soar as the nation's economic growth cooled.

Construction Bank reported on Wednesday an end-2016 nonperforming loan ratio of 1.52 percent, down from 1.56 percent in September and 1.63 percent in June, according to exchange filings. Agricultural Bank's level slipped to 2.37 percent by December from 2.39 percent three months earlier, while ICBC was unchanged at 1.62 percent.

The three lenders' full-year earnings all beat analysts' estimates, thanks to cost reductions and the lower-than-expected charges for bad loans. Their combined provisions for 2016 were more than 20 billion yuan below the amount forecast by analysts in a Bloomberg survey.

Going into this reporting season, analysts had expected the five lenders to post their first decline in combined annual profit since 2004, but the numbers so far already indicate a better overall outcome.

BLOOMBERG