Industrial and Commercial Bank of China chairman Jiang Jianqing yesterday said the mainland lender's net interest margin was showing signs of recovery.
However, lending by the world's largest bank has significantly moderated since the start of last month following robust loan growth in the first quarter.
New lending slowed to 51.5 billion yuan (HK$58.5 billion) last month, after new loans surged to 636.4 billion yuan in the first quarter, Mr Jiang said at the bank's annual general meeting in Hong Kong.
'While net interest margin narrowed significantly in the first quarter, it is relatively stable and we expect margins to bottom somewhat in the second quarter,' he said.
'The impact of last year's interest-rate cuts has largely passed through under a moderately loose monetary policy. There is also a significant increase in demand deposits in the second quarter that helps to offset margin pressures.'
The bank is the first state-owned lender to confirm that net interest margin, which reflects a lender's interest earning capability, had stopped falling in the second quarter and was beginning to pick up.
