Net asset value appreciation of the Industrial & Commercial Bank of China (ICBC), the nation's largest lender, reduced three foreign strategic investors' combined stake to 8.89 per cent. The US$3.8 billion investment of Goldman Sachs, Allianz Group and American Express (Amex) will now buy them 24.18 billion new shares, according to an ICBC statement over the weekend. The international investors agreed in January, before completion of the external audit of the mainland bank's annual results last year, to buy stakes in ICBC at 1.22 times the projected book value at the end of December. The three, whose commitment marked the largest single foreign direct investment in the nation's financial sector to date, were then expected to hold a 10 per cent equity interest between them. But the number of shares ICBC eventually issued to the three investors was 1.1 percentage points less than previously estimated. It came after ICBC's actual audited per share book value exceeded earlier estimates, helped by last year's profit and revaluation of fixed assets. Mainland state-owned firms traditionally value their properties at historical costs. Their reassessment at market value by independent valuers during the companies' financial restructuring typically leads to considerable shareholders' equity appreciation. The lender, preparing for an up to US$15 billion initial public offering in Hong Kong as early as September, has not released its audited financial figures for last year. However, first quarter non-performing loan (NPL) figures released by the China Banking Regulatory Commission (CBRC) provided evidence that the Big Four state banks were no longer relying on loan portfolio growth to dilute their NPL ratio. The outstanding problem loans of the Big Four fell 1.26 per cent in the first three months to 1.05 trillion yuan. Their NPL ratio edged down 0.7 percentage point from the beginning of the year to 9.8 per cent at the end of March, the first time the ratio has hit single digits. Less burdened with bad loans historically, the 11 younger, second-tier national joint stock banks nevertheless saw a 0.5 percentage point increase in outstanding NPLs to 148.02 billion yuan. However, their continuing aggressive asset expansion, long warned by analysts as a source of deterioration in banks' asset quality, diluted their NPL ratio by another 0.3 percentage point to 3.9 per cent. Both rural commercial banks and foreign banks operating in China witnessed declining outstanding NPLs and problem loan ratios in the first three months. The Big Four and the joint stock banks expanded their loan loss reserves by 3.4 per cent in the first quarter to 364.4 billion yuan, representing a 33.4 per cent loan loss coverage ratio.