Hong Kong/Shanghai: Industrial and Commercial Bank of China Ltd (ICBC) said on Thursday net profit fell 3 per cent in the fourth quarter of 2014, the first time its final quarter profit has fallen since 2008 as China’s economic growth slows.
ICBC, the world’s biggest bank by assets, also saw a sharp rise in bad loans, in common with peers that have seen more borrowers struggle to repay debts while economic growth decelerates to its slowest rate in a quarter of a century.
The rise in bad loans was largely due to defaults from small businesses, as well as from coal-related enterprises in Western China suffering from the fall in coal prices, ICBC said in a results filing.
The bank’s non-performing loan ratio rose to 1.13 per cent at end-December, from 1.06 per cent at end-September.
Net profit reached 55.3 billion yuan ($8.90 billion) in the three months through December from 57.1 billion yuan in the same period a year prior, less than the 57 billion yuan forecast by analysts.
In common with the other “big four” lenders — Agricultural Bank of China Ltd, Bank of Communications Co Ltd and China Construction Bank Corp
— ICBC has responded to slowing economic growth by expanding overseas.
In April last year it bought 75 per cent of Turkey’s Tekstil Bankasi AS, and in February this year it paid $690 million for 60 per cent of the British subsidiary of South Africa’s Standard Bank Group Ltd.
ICBC’s shares in Shanghai closed 0.4 per cent higher ahead of the earnings release, in line with the benchmark Shanghai Shenzhen CSI 300 Index.
($1 = 6.2135 Chinese yuan renminbi)
(Reporting by Engen Tham and Lawrence White; Editing by Christopher Cushing)
