(Recasts, adds reasons for performance, analyst quote, video
HONG KONG/SHANGHAI, March 27 Industrial and
Commercial Bank of China Ltd (ICBC) said
on Thursday net profits rose a higher-than-expected 7.9 percent
in the fourth quarter, buoyed by strong growth in interest
The profit growth was the slowest in a decade, but surprised
analysts who had expected China's biggest bank, and its peers,
to report even weaker growth as they boosted provisions in
anticipation of more loan defaults.
ICBC said net profit rose to 57.1 billion yuan ($9.2
billion) in the fourth quarter from 52.9 billion yuan in the
same year-ago period, higher than an average estimate of 52.5
billion yuan made by ten analysts polled by Thomson Reuters.
The bank, like other Hong-Kong listed lenders, benefited
from resilient net interest margins despite the government's
efforts to liberalise interest rates.
"Despite scary headlines about loan and WMP (wealth
management product) defaults, the credit shock that has been
widely anticipated for several years has yet to materialize,"
Jim Antos of Mizuho Securities Asia Ltd wrote in a research note
issued ahead of the ICBC earnings.
For the whole of 2013, net profit rose to 262.7 billion yuan
from 238.5 billion yuan a year earlier, ICBC said in its
Interest income increased by 8.7 percent in the fourth
quarter to 116.0 billion yuan, while fees and commissions rose
1.7 percent to 26.8 billion yuan.
The bank's net interest margin was 2.57 percent at the end
of 2013, the same as at the end of June.
ICBC's non-performing loan ratio inched up to 0.94 percent
at end-December 2013, from 0.91 percent at end-September.
ICBC said it saw relatively large increases in the number of
non-performing loans (NPLs) in the Yangtze river delta, the
Pearl river delta and the Bohai Rim, as weak domestic and
overseas demand pressured small and medium sized businesses in
those export-oriented industrial regions.
The bank said it would increase total assets by 1.4 trillion
yuan and liabilities by 1.3 trillion yuan in 2014, targeting a
year-end NPL ratio within 1.2 percent.
ICBC is the third of China's four biggest banks to report
annual earnings this week. The Agricultural Bank of China
on Tuesday posted its slowest annual
profit growth as a listed company, due to higher bad loan
Bank of China posted on Wednesday a
surprise 11 percent increase in fourth-quarter net profits after
it shrugged off concerns about rising bad loans and cut
ICBC's shares closed down 0.2 percent in Hong Kong on
Thursday, ahead of the results announcement.
($1 = 6.2094 Chinese Yuan)
(Reporting by Gabriel Wildau, Lawrence White and Shanghai
newsroom; Editing by Miral Fahmy)