China's Industrial Bank Q1 profit down 4.75 pct

SHANGHAI, April 28 (Reuters) - China's Industrial Bank (601166.SS) on Tuesday posted a 4.75 percent drop in first-quarter from a year earlier as its quarterly report showed a decline in its profit margin after Beijing cut interest rates five times late last year to help curb a slowing economy.

Industrial Bank, a medium-sized bank based in the southern province of Fujian, recorded a net profit attributable to the listed company's investors of 2.94 billion yuan ($430 million) in the first three months of this year, it said in its quarterly earnings report.

Its report showed quarterly returns on assets (ROA) dropped 1.69 percentage points from a year earlier to 5.66 percent in the first quarter after the interest rate cuts narrowed the rate gap between bank loans versus deposits.

Consequently, its operational income fell 8.4 percent to 6.72 billion yuan in the first quarter from 7.34 billion yuan a year earlier, propelled by a 6.7 percent drop in net interest income to 5.94 billion yuan, its report showed.

These falls occured even when the bank's outstanding loans rose 17 percent to 585 billion yuan by the end of March from the end of 2008 and outstanding deposits increased by 15 percent to 727 billion yuan, according to the quarterly report published in the official Shanghai Securities News.

Separately, Industrial Bank on Tuesday reported that its net attributable rose 32.6 percent to 11.39 billion yuan in 2008 from 2007, with its annual ROA rising 1.15 percentage points to 23.22 percent last year, its 2008 earnings report showed.

The two earnings reports showed its ratio of non-performing loans to total lending edged down to 0.72 percent by the end of March from 0.83 percent at the end of 2008.

Its capital adequacy stood at 11.24 percent at the end of 2008 compared with a minimum regulatory requirement of 8 percent. Quarterly capital adequacy figure was not offered. (Reporting by Lu Jianxin and Jacqueline Wong; Editing by Chris Lewis)