ICBC’s net profit for third quarter falls 0.07pc to 72.8 billion yuan
The Industrial and Commercial Bank of China said its net profit for the third quarter ending September 30 fell 0.07 per cent year on year to 72.8 billion yuan as the bank saw a large drop in income from lending compared to a year ago.
“The government has been pressuring banks to cut fees in multiple lines of services this year. The bank’s pre-provision level for operating profits was affected,” said Shujin Chen, research director at DBS Vickers. “Both net interest margins and fee revenues at ICBC have been under negative growth this year.
ICBC said its net profit for the nine months ending September edged up 0.53 per cent year on year to 223.5billion yuan. Net interest income for the nine month period was down 7.5 per cent to 351.4billion yuan, while fees and commissions rose 2.3per cent to 113.7billion yuan.
Meanwhile, the latest non-performing loans ratio at the bank stands at 1.62 per cent, up from the 1.55 per cent at the end of June this year.
“If ICBC could begin to show it is stabilising on its level of non-performing loans formation, we could probably start to confirm the thesis that we are to see a peak on the non-performing loans issue in the banking industry next year,” Chen said.
The central bank has been using price measures to change banks’ behaviour
Last week, mainland media reported that ICBC had been penalised by having points deducted from its Macro-Prudential Assessment System score by the People’s Bank of China for failing to meet the minimum 150 per cent coverage ratio for cash reserves that banks must set aside for bad loans. ICBC declined to comment on the matter when contacted by the South China Morning Post.
