Chinese banks are kicking off the reporting season in style. But the writing is on the wall, as demonstrated by Tuesday’s results from Bank of China, the world’s third-biggest lender by market value. While net profits rose 14 per cent to $9.4bn, fourth-quarter income was a third that of the prior quarter. Growth evaporated at the pre-tax level, illustrating the fillip of lower taxes.

Banking in China is a relatively simple business: four-fifths of revenues come from lending money at government set rates. Beijing is in stimulus mode and banks are rallying to the cause, increasing year-on-year lending by in excess of 20 per cent in January and February. But volume gains are partially offset by margin contraction, the result of lower interest rates and savers switching into higher yielding time deposits.