ICBC and Citic Securities forecast strong earnings despite global woes

Industrial and Commercial Bank of China, the nation's largest lender, estimates its first-quarter net profit jumped more than 50 per cent, driven by strong core earnings growth and thanks to the new income tax rate.

Citic Securities, the country's biggest brokerage, also estimates net profit for the quarter more than doubled.

Their rosy estimates suggested that uncertainties in the global financial markets and economy have not dented earnings growth at the mainland's major financial firms.

Based on its net profit of 18.71 billion yuan in the first quarter of last year, which is based on mainland accounting standards, ICBC's earnings for the first three months exceeded 28.06 billion yuan.

The bank attributed the strong growth to rapid increases in net interest income and net fees and commissions. The new income tax rate, which dropped to 25 per cent from 33 per cent, also helped boost earnings, it added.

ICBC, which reported a 64.9 per cent jump in profit to 82.3 billion yuan for last year, is aggressively expanding into Hong Kong investment banking and asset management business by setting up ventures.

It is seeking a licence from the Securities and Futures Commission to set up a wholly owned investment bank, according to sources in the investment banking sector. The bank decided to make such a move as early as last year but only submitted an application now.