ICBC beats predictions with 7 per cent profit rise in first quarter

Mainland's biggest bank sees net interest income increase inthe first quarter

PUBLISHED : Wednesday, 30 April, 2014, 1:31am
UPDATED : Wednesday, 30 April, 2014, 1:31am

Industrial and Commercial Bank of China beat estimates with a rise of nearly 7 per cent in first-quarter net profit, the fourth of the mainland's biggest lenders to show more resilient profits than expected as interest income held firm.

ICBC said net profit grew to 73.3 billion yuan (HK$92 billion), compared with an average estimate of 71.5 billion yuan from a poll of 11 analysts.

Interest margins are expected to fall in the long run for mainland lenders as regulators liberalise interest rates that guarantee a fat spread between the rate banks pay depositors and the rate at which they lend.

ICBC, the mainland's largest listed bank, did not say what had driven its profits higher but, like its peers, it saw higher net interest income in the first quarter.

Net interest income was 115.8 billion yuan for the period, a year-on-year increase of 8.5 per cent, while gains in net fees and commissions jumped 10.2 per cent to 37.7 billion yuan.

The non-performing loan ratio was 0.97 per cent at the end of the first quarter, compared with 0.94 per cent at the end of December.

The lender also said it had agreed to pay 669 million Turkish lira (HK$2.43 billion) for a 75 per cent stake in Turkey's Tekstilbank as it sought to expand overseas.

ICBC is the last of the mainland's Big Four state-owned banks to report earnings for the first quarter.

Shares in the lender rose 1.08 per cent to HK$4.67 yesterday, while the benchmark Hang Seng Index gained 1.45 per cent.

Two other banks also reported their results for the first quarter.

China Citic Bank said yesterday that net profit grew 16.14 per cent to 10.71 billion yuan from a year ago. Net operating income surged 23.19 per cent to more than 29.75 billion yuan, with net interest income up 11.17 per cent to 22.14 billion yuan. But net interest margin fell 0.28 percentage point to 2.37 per cent.

Its non-performing loans reached 23.58 billion yuan, up 18.12 per cent over the end of last year.

Meanwhile, net profit at Bank of Communications rose 5.56 per cent to 18.69 billion yuan from a year earlier. Earnings per share climbed to 25 fen.

At the end of March, its non-performing loans grew 5.09 per cent to 36.06 billion yuan from the end of 2013. The bank said it strengthened collection of non-performing loans in the first quarter.


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