Industrial and Commercial Bank of China (ICBC) lent out just 20.6 per cent of the net increase in yuan deposits in the year to last month. The figure was a fresh indicator of the surplus liquidity in the mainland banking sector in the aftermath of economic tightening which, together with declining bond yields, cast doubt about the profit margin growth at banks, analysts said. ICBC's domestic branches saw a net addition of 566.2 billion yuan in deposits in the 12-month period, against a more moderate 117.1 billion yuan increase in outstanding loans, the lender said yesterday. The widening gap was the natural result of economic slowdown, BNP Paribas Peregrine analyst Dorris Chen Huanming said. Facing macroeconomic uncertainties and social security reforms, consumers are putting away more money in bank savings. Meanwhile, mainland banks have been told to tighten lending to overheating sectors and warned of resurging non-performing loans. Commanding a 20 per cent share of the mainland banking market, ICBC's lending practice reflects a similar but tamer trend in the sector. Mainland banks lent out 53.5 per cent of the 3.66 trillion yuan net increase in yuan deposits in the first three quarters, with an outstanding yuan loan-deposit ratio of 68 per cent, according to the People's Bank of China's third-quarter monetary policy report. ICBC reported a non-performing loan to outstanding loan ratio of 4.75 per cent at the end of last month, against 4.6 per cent at the end of September. It had a third-quarter accounting profit of 13.14 billion yuan, and generated 41.7 billion yuan from yuan treasury services in the first 10 months, or 26.59 per cent of revenue.
