Earnings growth at Chinese banks slowed dramatically to 19 percent last year from 36 percent in 2011 and 2010, Fitch Ratings said Thursday.

The agency cautioned in a report that lower earnings growth at the banks is likely to weaken internal capital generation and put further pressure on capital this year and next.

Fitch said that rising funding costs amid weakening liquidity, the rapid growth of lower yielding non-loan credit, and slower growth of fees and commissions will weigh on earnings.

"We expect all these trends to intensify from 2013 to 2014, and be exacerbated by further moves toward interest rate liberalization, which will increase already rising funding costs,'' Fitch added.

Net profits at China's top five banks may rise nearly 12 percent to above 750 billion yuan (US$120.7 billion) in 2012, the official Shanghai Securities News reported yesterday.

It also said that bad loan ratio at the top lenders may improve in 2012 to 0.99 percent, while non-performing loan provisions are sufficient to cover 300 percent of estimated bad loans.

New lending at the Industrial and Commercial Bank of China, China Construction Bank, the Agricultural Bank of China and the Bank of China slowed in March after the lending spree in the first two months. They gave out combined new loans of 144 billion yuan in the first 17 days this month, a sharp drop from 250 billion yuan in the same period in February, the newspaper reported.