ICBC posts 4.7% H1 profit rise on fee growth

Beijing

INDUSTRIAL and Commercial Bank of China (ICBC) , the world's largest commercial bank, posted a 4.7 per cent rise in first-half net profit largely on growth in fee and commission income.

ICBC's half-year results underpin the strength of China's largest banks despite a slowing Chinese economy and Beijing prodding them to lend to riskier small and medium-sized firms.

Its profit for the six months ended June 30 rose to 167.93 billion yuan (S$32.62 billion) from 160.4 billion yuan in the same period a year ago, according to the lender's statement to the Hong Kong stock exchange on Thursday.

The figure implied a net profit of 85.93 billion yuan for the second quarter, up 5.2 per cent from 81.64 billion yuan a year ago, according to Reuters calculations.

Net fee and commission income grew 11.7 per cent in the first-half to 88.5 billion yuan from 79.3 billion yuan on the strength of the bank's card business, it said.

However, like Bank of Communications and China Construction Bank Corp, two of the big five banks who reported earlier, ICBC's net interest margin, a key gauge of profitability, slid to 2.29 per cent at end-June, from 2.31 per cent at end-March.

Smaller Chinese banks are facing liquidity issues and mounting risks. Three regional banks have been bailed out by Beijing this year. Large state banks acted as "white knights", with ICBC announcing a 30 billion yuan investment for a 10.82 per cent stake in troubled Bank of Jinzhou. REUTERS