Weak economy slows profit growth at ICBC and BoCom
Print Edition
The Industrial and Commercial Bank of China, the country’s biggest lender, and the Bank of Communications, the fifth-biggest, both posted slower growth in net profit in the first quarter amid an economic slowdown.
ICBC, the most profitable bank in the world, said yesterday that net profit rose 6.6 percent from a year earlier to 73.3 billion yuan (US$11.7 billion) in the first three months, the weakest quarterly earnings growth in almost five years.
Net interest income added 8.5 percent to 115.8 billion yuan while net fee and commission income rose 10.2 percent to 37.7 billion yuan.
During the first quarter, its non-performing loans rose by 6.9 billion yuan to 110.6 billion yuan. The NPL ratio added 0.03 percentage points to 0.97 percent.
Separately, ICBC said in a statement that it will buy 75.5 percent of Istanbul-based Tekstilbank for US$316 million. The acquisition is subject to regulatory approvals from China and Turkey.
Meanwhile, Shanghai-based BoCom’s net profit rose 5.6 percent year on year to 18.7 billion yuan in the first quarter. Net interest margin shrank from 2.52 percent to 2.33 percent during the period while net interest income edged up 0.8 percent from a year earlier to 32.3 billion yuan.
Net fee and commission income rose 10.2 percent to 7.6 billion yuan, accounting for 17 percent of net operating income.
BoCom’s NPLs rose from 34.3 billion yuan to 36.1 billion yuan while the bad loan ratio expanded 0.04 percentage points to 1.09 percent.
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