ICBC posts lacklustre earnings

Industrial and Commercial Bank of China (ICBC) has posted its slowest profit growth in three years, evidence that a sluggish economy is taking a toll on the country's biggest bank by assets.

Net profit rose 14 per cent to 61.3 billion yuan (HK$75.32 billion) year on year, missing Bloomberg's analyst estimates.

Credit Suisse analyst Tao Dong said that even though mainland banks were more willing to lend in the first quarter, demand seemed to be 'uncharacteristically slow'. 'We believe that there is a sea change in China. The constraints to growth have shifted from policy restrictions to demand limitation,' said Tao.

Yang Kaisheng, president of ICBC, said recently that the bank's lending plans this year would be in line with last year's, but that it would lend aggressively to strategic emerging industries, new manufacturing, services and the cultural sector, which spans publishing, media, music and films.

Loans to strategic emerging industries would double compared to last year. Loans to advanced manufacturing would increase to 25 per cent of total loans, and loans to companies in the services sector would rise to more than 20 per cent of total loans this year, said Yang.

The bank's fee income rose 10.4 per cent year on year to 28.6 billion yuan, which was lower than analysts had expected.