* ICBC Q1 net 73.3 bln yuan vs forecast 71.52 bln
* China's big banks beat f'casts as interest margins hold
* China central bank says to speed up interest rate reforms
(Recasts, adds details of big four banks' results)
HONG KONG/SHANGHAI, April 29 Industrial and
Commercial Bank of China Ltd (ICBC) beat estimates
with a near 7 percent rise in first-quarter net profit, the
fourth of China's biggest lenders to show more resilient profits
than expected as interest income held firm.
ICBC said net profit rose to 73.3 billion yuan
($11.7 billion) in the first quarter, compared with an average
estimate of 71.52 billion calculated from a Thomson Reuters poll
of 11 analysts.
Interest margins are expected to fall in the long run for
Chinese banks, as the country's regulators liberalise interest
rates that guarantee a fat spread between the rate banks pay
depositors and the rate at which they lend.
China's central bank said on Tuesday it will speed up
interest rate reforms and reiterated the urgency of establishing
a deposit insurance system.
Further short-term pressure on interest margins comes from
competition for depositors' money from wealth management
products and online funds, which are pushing savers into deposit
products that are costlier for banks to provide.
"Internet finance is forcing commercial banks to reform.
They need to develop a stronger online mentality, bring net
technology into their operations and carry out further business
model innovation," said Raymond Yung, financial services leader
at PwC China in a statement ahead of the earnings season.
ICBC is the last of China's top four banks to report
earnings for the first quarter. Last week, Agricultural Bank of
China , Bank of China and China
Construction Bank all reported better-than-expected
results as net interest margins held up in the face of rate
In the first quarter, banks resisted pressures on interest
margins better than the market had expected, analysts said in
research notes published after the earnings, by boosting returns
from loans amid tight credit conditions in China.
Shares of the big four banks have fallen an average of 3
percent in Hong Kong in the last five days, despite the better
than expected results, suggesting investors are more focused on
longer-term concerns about asset quality and interest margins.
ICBC also said on Tuesday it had agreed to pay 669 million
Turkish lira ($314.7 million) for 75 percent of Turkey's
Tekstilbank as it seeks to expand overseas.
($1 = 6.2530 Chinese Yuan)
($1 = 2.1256 Turkish Liras)
(Reporting by Shanghai Newsroom and Lawrence White in Hong
Kong; Editing by Miral Fahmy and David Holmes)