Industrial & Commercial Bank of China Reports 1.2% Rise in Net Profit

Industrial & Commercial Bank of China (ICBC) announced its first-half results on Wednesday, revealing a net profit increase of 1.2% compared to the same period last year. The bank reported a net profit of 170.11 billion Chinese yuan ($23.36 billion) for the six-month period ending June 30, slightly below the estimated figure of CNY176.55 billion from analysts surveyed by Visible Alpha.

Key Highlights

Asset Quality

ICBC's overall nonperforming-loan ratio improved slightly, standing at 1.36% at the end of June versus 1.38% at the end of December. However, the ratio of corporate real-estate loans at its domestic branches increased to 6.68% by the end of June, up from 6.14% at the end of 2022. Conversely, the ratio for the manufacturing industry declined to 2.31% from 3.02%.

Bond Gains

Despite lower net interest income and fees and commissions, ICBC benefited from gains in its bond investments, which bolstered its bottom line. The bank experienced a significant increase in first-half net trading income, which more than doubled to CNY9.87 billion from CNY4.635 billion in the previous year. This growth was primarily driven by an increase in bond-investment income. Additionally, net gains on financial investments surged by 76% to CNY12.66 billion, primarily due to higher valuations of bonds and funds.

Interest Income

Net interest income dipped by 3.9% from the previous year to CNY336.99 billion, falling short of the estimated amount of CNY342.84 billion according to the Visible Alpha poll.

For more information, please contact Kosaku Narioka.