Beijing branch profit tops for ICBC nationwide
By Zhang Dingmin (China Daily)
Updated: 2004-03-25 09:22

The Beijing branch of China's largest commercial bank said yesterday its operating profit capped 10 billion yuan (US$1.2 billion) last year, the best performance among the lender's thousands of regional branches.

The Industrial and Commercial Bank of China's (ICBC) Beijing Branch chalked up 10.2 billion yuan (US$1.22 billion) in operating profits for 2003, up 23.82 per cent on a year-on-year basis.

Improving profitability at regional branches contributed to the bank's overall profit growth last year, and remains key to the success of the State-owned lender's plan to complete its joint-stock restructuring and get ready for an initial public offering by the end of 2006, analysts said.

"The profitability at its branches in wealthy regions is key to the bank's overall profits," said Wang Yuanhong, a senior analyst with the State Information Centre.

The ICBC realized 62.1 billion yuan (US$7.5 billion) in total operating profits last year, a jump of 40 per cent from the previous year.

Last month, the bank said it aims to achieve 240 billion yuan (US$28.9 billion) in operating profits in the three years ending in 2006, and dispose of 300 billion yuan (US$36 billion) of non-performing loans (NPLs) during the same period, so as to bring its NPL ratio down to below 10 per cent, and the ratio of all non-performing assets to around 6 per cent at the end of 2006.

The NPL ratio is expected to be reduced to 18 per cent at the end of this year.

The bank is widely expected to be the third of the four largest State-owned commercial banks, which own more than half of the nation's banking assets, to list on the stock market.

The Bank of China and China Construction Bank were chosen late last year for a pilot reform package designed for what are commonly known as the Big Four, and received a total of US$45 billion in capital to boost their capital adequacy ratios.

The ICBC Beijing Branch said its asset quality improved significantly last year, with quality corporate clients accounting for 66.82 per cent of its outstanding loans, up 6.19 per cent from the previous year.

Income from its intermediary services totalled 785 million yuan (US$94 million), up 51.3 per cent from a year earlier.

"The traditional income structure, featuring an overreliance on interest income, has been improved," said a spokesperson from the Beijing Branch.

The branch's NPL ratio dipped to 8.15 per cent at the end of last year from 17.62 per cent three years earlier, and it aims to bring the ratio down to 2 per cent at the end of 2006.

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