Agricultural Bank of China's net profit up 2% to US$26b in 2016

NPL ratio also improved to 2.37%.

Profit rose 2% to Rmb184b (US$26b), in line with analysts' estimate but 3% ahead of consensus.

"Overall, we view the result as solid and well balanced, given 1) steady B/S growth; 2) impressive cost control; 3) stable asset quality and 4) rising CAR," said Jefferies.

Here's more from Jefferies:

B/S: steady BS expansion. Total loan, assets and deposit grew 9.1%, 10.0% and 11.1% in 2016, respectively. Retail deposit contribution rose from 52.6% to 55.9%, a trend similar to CMB or BCOM.

P&L: fee growth and cost management largely offset margin impact. Net fee rose 10%, thanks to strong agency business. Cost management was impressive- total expenses dropped 6% after excluding tax code change impact.

NPL ratio marginally improved from 2.39% to 2.37% in 2016. Overdue loan ratio and special mention loan ratio both dropped by c30bp.

CET1 CAR rose by 14bp to 10.38%. We see no imminent equity-raising need.

County region pre-tax profit dropped 13%. This is the only area we have some concern. It seems rural area has higher asset quality volatility.