ICBC seeks to boost fee income and loans
Updated: 2008-09-27 07:26
(HK Edition)
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Industrial and Commercial Bank of China Ltd (ICBC), the world's largest bank by market value, is seeking to boost fee income and loans to small companies after a cut in interest rates eroded its profit margins, Chairman Jiang Jianqing said.
The central bank's 27 basis-point cut in the benchmark one-year lending rate on Sept 15 will reduce ICBC's profit by as much as 500 million yuan this year, Jiang told reporters in Tianjin on Friday, ahead of the World Economic Forum. The cut may have a "bigger impact" on profit in 2009, he added.
"The cut will have a 400 million to 500 million yuan profit impact on us this year," Jiang said. "We are increasing our pricing ability for loans, boosting fee income and adjusting our loan structure to remedy the rate cut."
Jiang said ICBC's profit more than doubled since 2005 as annual economic growth of more than 10 percent bolstered corporate loans and services to the nation's growing number of wealthy people.
While the lender's domestic bias shielded it from the US subprime crisis, reductions in lending rates may hurt profits on loans in China.
ICBC became the world's most profitable bank after it earned a record 64.5 billion yuan in the first half, topping the $7.72 billion earned by its rival HSBC Holdings Plc.
The bank's full-year profit may reach 120 billion yuan, according to a consensus estimate.
Bloomberg
(HK Edition 09/27/2008 page2)