(Bloomberg) -- China’s mega lenders, led by the Industrial & Commercial Bank of China Ltd., delivered stable profit gains as they were directed to pump up lending to support the flagging economy.

ICBC, the world’s largest bank by assets, posted a 6.8% increase in third-quarter profit, while Bank of China Ltd. said net income grew 4.9%. Agricultural Bank of China Ltd. and Bank of Communications Co. also reported higher profits. China Construction Bank Corp.’s net income rose 8.6%.

The $52 trillion banking industry is steeped in challenges as the once-booming property sector is mired in a prolonged slump and Beijing’s Covid zero approach stunts economic growth. Banks have been urged to accelerate lending related to infrastructure as their balance sheets are weighed down by an increase in bad loans.

China’s financial regulators have told the biggest banks to extend at least 600 billion yuan ($85 billion) of net financing to the property sector in the final four months of this year, Bloomberg News reported in September, citing people familiar with the matter. 

As China’s property crisis and Covid-zero policy rolls on, economists surveyed by Bloomberg forecast growth of just 3.3% this year, which barring the economic shock from the pandemic in 2020 would be the slowest pace in more than four decades. Gross domestic product data released this week showed a mixed recovery in the third quarter, with lower retail sales and higher unemployment.

At the country’s National Party Congress last week, President Xi Jinping sought to allay concerns by stating that China’s economy is “resilient” and highlighted long-term growth prospects. Xi did not indicate any departure from China’s zero-tolerance approach to fighting the pandemic.

Authorities have rolled out a series of policies in an attempt to boost the economy. The People’s Bank of China lowered interest rates on housing provident fund loans for buyers of their first homes, the central government has unveiled a rare tax incentive for homebuyers, and the central bank cut its benchmark interest rate in August. Still, analysts see limited impact from these measures.

“We barely see any apparent good news,” said said Liao Zhiming, an analyst at China Merchant Securities. “Bank margins will remain in a downturn, with non performing loan risks from small firms and defaults staying high for the rest of the year.”

Leading up to earnings, state-run papers have highlighted a positive outlook for the property sector and economic growth. The Securities Times said that China’s new home market may gradually recover in the fourth quarter as measures take effect, while The Securities Daily stated that China’s bank loans will help economic growth in that period.

--With assistance from Amanda Wang and Manuel Baigorri.

(Updates with Bank of China and China Construction Bank results in second paragraph.)

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