ICBC and BoC post good profit increases
(2 September 2013 – China) Better-than-expected profits have been reported by Industrial and Commercial Bank of China Ltd (ICBC) and Bank Of China Ltd (BoC) in the second quarter after a jump in fees.
ICBC posted net profit of US$11.4 billion (A$12.7 billion) for the second quarter, up 12.5 percent from a year earlier.
ICBC is the world's largest bank by market capitalisation and China’s largest bank.
The bank also reported that overdue loans not designated as NPLs rose to US$11.3 billion, or 0.73 percent of all loans, from 0.71 percent in 2012.
BoC reported quarterly net profit of US$6.7 billion up 17 percent. It is China's fourth-largest lender.
Profit growth at most Chinese banks has decelerated this year as new loan growth weakened while profit margins are threatened by policy moves to allow banks to offer higher rates on customer deposits.
The China Banking Association said last month it expects net profit growth for China's 17 listed banks to slow to 8 percent in 2013 from 19 percent in 2012.
ICBC's net interest margin, or the difference between the interest rate that banks pay for funds and the rates they charge to borrowers for loans, was 2.57 percent in the first half.
BoC reported its net interest margin at 2.23 percent in the first half, up one basis point from 2.22 percent in the first quarter.