RETAIL BANKING | Cesar Tordesillas, China

ICBC posts over RMB100 B after-tax profit in H1

ICBC announced after-tax profit in the first half of 2011 of RMB 109.6 billion, up 29% year-on-year.


In light of the market adversity, the International Commercial Bank of China has stepped up its risk management efforts since January this year. ICBC embarked on a program of the set-up and application of internal rating system and strictly followed the "Three Rules and One Guidelines" to continuously enhance the Bank's risk management and quality of credit assets.

In the first half of 2011, ICBC's bad loan balance and ratio registered "both decline" on top of "both declined" in its eleventh year. Bad loan rate moved down to 0.95% at the end of June, the first time under 1%, the best record in ICBC history. Meanwhile, provision coverage rate of bad loans surged 32.94 percentage points further over the end of 2010 to 261.14%, a significant boost to the Bank's risk capabilities. ICBC has controlled the risk exposure

In extending credit, ICBC has maintained a good balanced growth in credit outlay during the first six months of 2011. RMB loans released by domestic branches have increased RMB 410.9 billion, or 6.6%, from the beginning of the year.At the end of June, the total amount of small business loans outstanding reached RMB 591.7 billion, up RMB 119.2 billion, or 25.2%, from beginning of the year. Domestic outstanding trade finance reached RMB 592.3 billion, rising 21.2% from the beginning of the year and making up 34% of total outstanding liquidity loans. Balance of domestic personal loans rose RMB 177.6 billion, or 10.9% from the beginning of the year to RMB 1810.8 billion at the end of June, of which, personal consumer loans, personal business loans rose 20.6% and 22.2% respectively since January 2011. Growth of non-housing loans accounted for 75.6%, for the first time more than that of personal housing loans.

In liability business, ICBC remained as the world's No.1 savings bank by having a balance of customer deposits of RMB 12.05 trillion, up RMB 901.6 billion, or 8.1%, from the beginning of the year. Of which, balance of savings deposit in all domestic branches was RMB 5679.1 billion at the end of June, up 8.3% over the end of previous year.

Meanwhile, in January-June period of this year, ICBC sold RMB 2.78 trillion of independently-developed wealth management products, up 36.6% against the same period of last year.  At the end of June, the Bank's loan to  deposit ratio of 61.2% was 6.9 percentage points lower than the industry average.

ICBC's intermediary businesses, another driver of the Bank, showed robust growth and strong competitive edge. Especially investment banking, precious metal, private banking, asset custody, cash management and credit card, emerging intermediary businesses with stellar performance, drove the fast growth of fee and commission income.

In the first half of the year, ICBC's net fee and commission income reached RMB 53.8 billion, representing a year-on-year increase of 45.8%, accounting for 23.27% of the Bank's total revenue, up 4.14 percentage points from a year earlier. Of which, in the first half of 2011, ICBC generated a revenue of RMB 13.16 billion from investment banking, representing an increase of 51.8% year-on-year and 23.1% of all revenue from intermediary businesses.

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