China's Top Bank Reports 6% Profit Rise

 

Industrial & Commercial Bank of China Ltd., the country’s biggest commercial lender by assets, said Monday its quarterly profit rose 6 percent from a year earlier despite a double-digit fall in interest income.

Profit for the three months ending March 31 was 35.1 billion yuan ($5.1 billion), or 0.11 yuan per share, the Beijing-based lender said.

Net interest income fell 12.9 percent from a year earlier to 57.8 billion yuan ($8.4 billion) as the spread between benchmark rates and financial market rates narrowed, the bank said. Other lenders have suffered a similar squeeze after repeated rate cuts by China’s central bank to boost economic growth amid the global financial crisis.

ICBC’s fee and commission income for the quarter rose 9.7 percent to 13.5 billion yuan ($2 billion), the bank said.

China’s mostly state-owned banking industry is isolated from global financial flows and has avoided the mortgage-related turmoil that is battering Western institutions.

ICBC said its total assets rose 12.5 percent over the course of the quarter to 11 trillion yuan ($1.6 trillion).

The bank reported a 35.2 percent increase in annual profit in 2008 but warned of “severe challenges” this year.

China’s second-largest commercial lender, China Construction Bank Ltd., reported earlier its first quarter profit fell 18 percent due to smaller net interest income.

4/27/2009 5:59 AM BEIJING (AP)