ICBC and BoCom's 2012 earnings growth halves
By Hu Xiaocen |
March 28, 2013, Thursday
|
Print Edition
Print Edition
THE Industrial and Commercial Bank of China and the Bank of Communications saw their earnings growth halve in 2012 as the Chinese economy expanded at the slowest pace in 13 years.
ICBC reported a 14.5-percent rise in earnings last year, the weakest pace since it went public in 2006, according to the lender's annual report published yesterday. Its net profit totaled 238.5 billion yuan (US$38 billion) last year.
But the world's most profitable lender saw its net interest margin improve by 0.05 percentage point to 2.66 percent despite the faster pace interest rate liberalization in the country last year.
Analysts, however, warned that more liberal interest rates would result in more aggressive competition among the lenders after the People's Bank of China allowed banks to offer up to 10 percent above the benchmark deposit rate for the first time in June.
BOC International, the investment banking unit of Bank of China, said ICBC's net interest margin will shed 0.21 percentage point this year due to higher deposit cost arising from keener competition.
Shanghai-based BoCom, China's fifth-biggest lender, also posted a weaker profit growth of 15.2 percent to 58.4 billion yuan for 2012 yesterday.
BOC International predicted that Chinese banks will face even tougher years ahead as their profit growth are set to be under 6.2 percent this year and 3.7 percent in 2014. It said the average growth rate at the big five banks slowed to 15 percent last year from 26 percent in 2011.
The big five banks - ICBC, China Construction Bank, the Agricultural Bank of China, BOC and BoCom - have posted a combined profit of 775 billion yuan, beating earlier hopes of 750 billion yuan.
ICBC reported a 14.5-percent rise in earnings last year, the weakest pace since it went public in 2006, according to the lender's annual report published yesterday. Its net profit totaled 238.5 billion yuan (US$38 billion) last year.
But the world's most profitable lender saw its net interest margin improve by 0.05 percentage point to 2.66 percent despite the faster pace interest rate liberalization in the country last year.
Analysts, however, warned that more liberal interest rates would result in more aggressive competition among the lenders after the People's Bank of China allowed banks to offer up to 10 percent above the benchmark deposit rate for the first time in June.
BOC International, the investment banking unit of Bank of China, said ICBC's net interest margin will shed 0.21 percentage point this year due to higher deposit cost arising from keener competition.
Shanghai-based BoCom, China's fifth-biggest lender, also posted a weaker profit growth of 15.2 percent to 58.4 billion yuan for 2012 yesterday.
BOC International predicted that Chinese banks will face even tougher years ahead as their profit growth are set to be under 6.2 percent this year and 3.7 percent in 2014. It said the average growth rate at the big five banks slowed to 15 percent last year from 26 percent in 2011.
The big five banks - ICBC, China Construction Bank, the Agricultural Bank of China, BOC and BoCom - have posted a combined profit of 775 billion yuan, beating earlier hopes of 750 billion yuan.
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