(Recasts, adds performance milestone, share price performance)
HONG KONG/SHANGHAI Aug 28 (Reuters) - Industrial and Commercial Bank of China , the country's largest bank, reported its lowest second-quarter profit growth in five years and an increase in bad loans, affected by a slowing economy.
ICBC's earnings were similar to its smaller peers, which also reported this week lower profit growth and higher bad loans during the second quarter.
ICBC made a second-quarter net profit of 74.8 billion yuan, according to Reuters calculations based on its earnings, a year-on-year growth of 7 percent, slower than the 12.5 percent year-on-year growth rate in the same 2013 period.
It was also the slowest year-on-year second quarter increase since the 2.9 percent profit growth reported in 2009.
ICBC's shares in the last 30 days have fallen 1 percent, making it the second worst performer among Chinese lenders after China Citic Bank Corp, according to Thomson Reuters Starmine data. The lender is down almost 2 percent in the year to date in Hong Kong, against a 6 percent rise in the benchmark Hang Seng index.
ICBC's non-performing loan ratio increased slightly to 0.99 percent at end-June from 0.97 percent at end-March.
Most Chinese state-banks are trying to decrease the proportion of non-performing loans, which have spiked as economic growth slows. China's bad loan levels rose to 1.08 percent at the end of June, according to official data, the highest ratio since 2011.
ICBC's total capital adequacy rose to 13.67 percent, compared to 13.22 percent at end-March.
ICBC said in April it agreed to buy a 75.5 percent stake in Turkey's Tekstil Bankasi for $316 million, as the Chinese lender seeks to benefit from the rising trade between the two countries. ($1 = 6.1423 Chinese yuan) (Reporting By Engen Tham in SHANGHAI and Lawrence White in HONG KONG, additional reporting by Shilpa Murthy in BANGALORE; Editing by Miral Fahmy)