Banking News
- Big banks post major profit rise in 1st half
Date: 24-Aug-2007 Sources: (Xinhua Online)
BEIJING, Aug. 23 -- China's two biggest banks yesterday reported better-than-expected profit growth in the first half as a result of rising lending and fee-based income.
The Industrial and Commercial Bank of China's net profits increased 61 percent to 41 billion yuan (5.4 billion U.S. dollars), or 0.12 yuan a share, from 25.4 billion yuan, or 0.10 yuan a share, in the same period last year, the Beijing-based bank said yesterday. The jump beat the 38.9 billion yuan average estimate of eight analysts surveyed by Bloomberg News.
The Bank of China, ICBC'S smaller rival, also reported robust performance for the half.
BOC's net income rose 51 percent to 29.5 billion yuan, or 0.12 yuan a share, for the period from 19.5 billion yuan, or 0.09 yuan a share, a year earlier, BOC said yesterday. The increase outperformed the 26.6 billion yuan average estimate by Bloomberg analysts.
'The two banks are benefiting from rising loan and fee income growth against the backdrop of a booming economy,' said Qiu Zhicheng, a Haitong Securities Co analyst.
The Bank of China, ICBC'S smaller rival, also reported robust performance for the first half. (File photo)
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China's economy grew 11.9 percent in the second quarter, and banks are increasing profits by extending more loans and selling products ranging from credit cards to mutual funds.
ICBC's fee-based net income almost doubled to 14.9 billion yuan in the first half, benefiting from strong mutual fund distribution, custodian services and credit cards.
ICBC is riding the booming stock market as the biggest agent lender for funds distribution. The benchmark Shanghai Composite Index has gained 85 percent so far this year after 40 percent growth in the first half.
Qiu, who rates the bank neutral, said he expects ICBC's whole-year net profit to post a 55 percent increase.
ICBC plans to open 1,000 wealth management centers this year to compete against rivals in attracting the growing number of wealthy Chinese.
The Bank of China's interest net income grew 29 percent to 71 billion yuan, and its impaired-loan ratio was 3.72 percent at the end of June. BOC's non-interest income rose 20 percent to 17.6 billion yuan.
BOC, the country's biggest foreign exchange lender, lost 1.2 billion yuan in the first half on foreign exchange, it said.
The two banks are among several Chinese lenders that have reported strong interim performance.
China Merchants Bank said on August 9 that first-half profit more than doubled. China Citic Bank Corp, which raised almost 6 billion dollars in an April stock sale, said on Wednesday that its net income jumped 82 percent in the period.
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