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ICBC (Asia) sets sights on expansion

By Lillian Liu and Zhang Jin (China Daily)
Updated: 2006-08-10 09:27

"It proved that mergers and acquisitions are a very effective way to fuel our growth," Zhu remarked.

As for its parent's listing plan, ICBC (Asia) said this would not affect its status and role.

"We will continue to be an important overseas arm of the ICBC," Zhu said.

He also believed the parent's Hong Kong listing would also benefit it, as it "looks forward to providing securities services for the parent company's initial public offering (IPO)." As a nearly 60 per cent-owned unit of the ICBC, the ICBC (Asia) will help collect cheques from IPO share subscribers.

Its parent is expected to raise a combined amount of US$19 billion in a simultaneous offering in Hong Kong and Shanghai, which is widely expected to take place in October, in what would be the world's largest IPO in six years.

The ICBC (Asia) yesterday posted a net profit of HK$560 million (US$72 million) for the first half of 2006, a year-on-year increase of 18 per cent.

It was a handsome performance given the highly competitive Hong Kong market, analysts said. Only two other local banks have so far announced interim earnings, with Hang Seng Bank registering 2 per cent growth and Bank of East Asia notching up 33 per cent growth.

Zhu attributed the gains to a wider net interest margin, which helped the bank earn a net interest income of HK$820 million (US$105 million), up 44 per cent year-on-year.

Its cost/income ratio, an indication measuring efficiency, decreased from 44.9 per cent to 37.7 per cent, "showing greater synergy from the acquisition of Belgian Bank," Zhu said.

The bank plans to keep the figure below 40 per cent for the whole of 2006, he added.