ICBC posts US$4.2b net profit
By Zheng Lifei (China Daily)
Updated: 2006-07-06 08:46
The Industrial and Commercial Bank of China (ICBC), the country's largest
lender, posted a net profit of 33.7 billion yuan (US$4.2 billion) last year, a
year-on-year increase of 12 per cent, according to its 2005 annual report
released yesterday.
The bank, which is planning to float on the Hong Kong
stock market later this year, said in the report that its outstanding
non-performing loans (NPL) amounted to 154.4 billion yuan (US$19.3 billion) at
the end of last year, or 4.69 per cent of its total lending, a sharp drop from
the previous year's 16.47 per cent.
The lender's capital adequacy ratio
hit 9.89 per cent and its core capital adequacy ratio reached 8.11 per cent at
the end of 2005, the report showed.
"It is an upbeat annual report, which
shows that the new management structure and operation process introduced by the
bank during its restructuring efforts worked," said Zhang Xi, a banking analyst
with China Galaxy Securities.
"All those figures show that ICBC's asset
quality has improved remarkably thanks to its restructuring efforts in the past
year," said Wu Yonggang, a banking analyst with Guotai Jun'an Securities.
Both analysts agree that the report casts a positive light on
ICBC's Hong Kong stock listing later this year.
"The report will
definitely shed a positive light on its upcoming stock listing," Zhang
said.
The report, she said, is likely to help the bank get a better
pricing when it is floated.
"Although its (ICBC's) net profit is slightly
lower than that of China Construction Bank, as the country's biggest bank with
the most extensive network, ICBC could have a better price," the analyst
said.
"The report will strengthen that argument," she added.
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