ICBC Net Edges Up as Stake-Sale Worry Casts Cloud Over Solid Growth Potential

• APRIL 28, 2009

JASON LEOW

SHANGHAI -- Industrial & Commercial Bank of China Ltd., the world's largest lender by market value, reported a 6.2% rise in first-quarter net profit, as higher fee-based income and gains in foreign-exchange holdings helped offset a drop in net interest income.

The fall in net interest income, a key source of profit for China's banks, reflects the challenges the banks face as the domestic economy slows. China's central bank cut the benchmark one-year lending interest rate by 2.16 percentage points in the second half of last year, to help boost the cooling economy.

With recent signs of a recovery in China's economy, analysts expect banks' growth to improve in the coming quarters. "From the perspective of profit growth rate, the first quarter may have been the low point in this cycle for China's banks," said Wang Qian, an analyst at Industrial Securities Co., of Shanghai.

"Concerns that foreign investors will likely sell part of their stakes in the bank have been hanging over ICBC. On Tuesday, Allianz SE and American Express Co. said they sold half of their stakes in ICBC in a private placement as the lockup period on them had expired. The lockup on the other half of their holdings expires on October 20.

Allianz now owns a 0.97% stake in ICBC and American Express 0.2%. Goldman Sachs Group Inc., another foreign investor, holds 4.93% in ICBC and has pledged a new lockup commitment covering 80% of those shares. It will be free to sell 20% of its stake after Tuesday."

For the first period, ICBC said its net rose to 35.15 billion yuan ($5.15 billion) from 33.11 billion yuan a year earlier. The latest profit was better than the average forecast of 33.70 billion yuan of four analysts surveyed by Dow Jones Newswires.

ICBC's net interest income fell 13% to 57.75 billion yuan, though loans rose 14%, or 636.4 billion yuan, from the end of last year, exceeding its full-year target of 530 billion yuan.

Income on foreign-exchange assets was a big driver of ICBC's rise in profit in the first quarter, said Lee Yuk-kei, an analyst at Core Pacific-Yamaichi International, in Hong Kong. ICBC reported 831 million yuan in net income on foreign-exchange assets in the first quarter, against a 3.36 billion yuan net loss a year earlier.

In addition, ICBC's fee-based income rose 9.7% in the first quarter to 13.55 billion yuan because of a 30% surge in China's stock market in the period.

Analysts say that how ICBC and the nation's other banks perform for the full year will depend in part on whether Beijing intends to keep up the lending momentum. Beijing has encouraged big banks like ICBC to lend funds to jump-start the economy.

New yuan loans surged to 4.58 trillion yuan in the first quarter, equivalent to more than 90% of the central government's minimum target for the full year.Though analysts expect lending growth to slow over the rest of the year, they said China's banks will likely extend seven trillion yuan of new loans this year, up 22% from the end of last year.

—Rose Yu

Write to Jason Leow at jason.leow@wsj.com

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ICBC Net Edges Up as Stake-Sale Worry Casts Cloud Over Solid Growth Potential

• APRIL 28, 2009

JASON LEOW

SHANGHAI -- Industrial & Commercial Bank of China Ltd., the world's largest lender by market value, reported a 6.2% rise in first-quarter net profit, as higher fee-based income and gains in foreign-exchange holdings helped offset a drop in net interest income.

The fall in net interest income, a key source of profit for China's banks, reflects the challenges the banks face as the domestic economy slows. China's central bank cut the benchmark one-year lending interest rate by 2.16 percentage points in the second half of last year, to help boost the cooling economy.

With recent signs of a recovery in China's economy, analysts expect banks' growth to improve in the coming quarters. "From the perspective of profit growth rate, the first quarter may have been the low point in this cycle for China's banks," said Wang Qian, an analyst at Industrial Securities Co., of Shanghai.

"Concerns that foreign investors will likely sell part of their stakes in the bank have been hanging over ICBC. On Tuesday, Allianz SE and American Express Co. said they sold half of their stakes in ICBC in a private placement as the lockup period on them had expired. The lockup on the other half of their holdings expires on October 20.

Allianz now owns a 0.97% stake in ICBC and American Express 0.2%. Goldman Sachs Group Inc., another foreign investor, holds 4.93% in ICBC and has pledged a new lockup commitment covering 80% of those shares. It will be free to sell 20% of its stake after Tuesday."

For the first period, ICBC said its net rose to 35.15 billion yuan ($5.15 billion) from 33.11 billion yuan a year earlier. The latest profit was better than the average forecast of 33.70 billion yuan of four analysts surveyed by Dow Jones Newswires.

ICBC's net interest income fell 13% to 57.75 billion yuan, though loans rose 14%, or 636.4 billion yuan, from the end of last year, exceeding its full-year target of 530 billion yuan.

Income on foreign-exchange assets was a big driver of ICBC's rise in profit in the first quarter, said Lee Yuk-kei, an analyst at Core Pacific-Yamaichi International, in Hong Kong. ICBC reported 831 million yuan in net income on foreign-exchange assets in the first quarter, against a 3.36 billion yuan net loss a year earlier.

In addition, ICBC's fee-based income rose 9.7% in the first quarter to 13.55 billion yuan because of a 30% surge in China's stock market in the period.

Analysts say that how ICBC and the nation's other banks perform for the full year will depend in part on whether Beijing intends to keep up the lending momentum. Beijing has encouraged big banks like ICBC to lend funds to jump-start the economy.

New yuan loans surged to 4.58 trillion yuan in the first quarter, equivalent to more than 90% of the central government's minimum target for the full year.Though analysts expect lending growth to slow over the rest of the year, they said China's banks will likely extend seven trillion yuan of new loans this year, up 22% from the end of last year.

—Rose Yu

Write to Jason Leow at jason.leow@wsj.com

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ICBC Net Edges Up as Stake-Sale Worry Casts Cloud Over Solid Growth Potential

• APRIL 28, 2009

JASON LEOW

SHANGHAI -- Industrial & Commercial Bank of China Ltd., the world's largest lender by market value, reported a 6.2% rise in first-quarter net profit, as higher fee-based income and gains in foreign-exchange holdings helped offset a drop in net interest income.

The fall in net interest income, a key source of profit for China's banks, reflects the challenges the banks face as the domestic economy slows. China's central bank cut the benchmark one-year lending interest rate by 2.16 percentage points in the second half of last year, to help boost the cooling economy.

With recent signs of a recovery in China's economy, analysts expect banks' growth to improve in the coming quarters. "From the perspective of profit growth rate, the first quarter may have been the low point in this cycle for China's banks," said Wang Qian, an analyst at Industrial Securities Co., of Shanghai.

"Concerns that foreign investors will likely sell part of their stakes in the bank have been hanging over ICBC. On Tuesday, Allianz SE and American Express Co. said they sold half of their stakes in ICBC in a private placement as the lockup period on them had expired. The lockup on the other half of their holdings expires on October 20.

Allianz now owns a 0.97% stake in ICBC and American Express 0.2%. Goldman Sachs Group Inc., another foreign investor, holds 4.93% in ICBC and has pledged a new lockup commitment covering 80% of those shares. It will be free to sell 20% of its stake after Tuesday."

For the first period, ICBC said its net rose to 35.15 billion yuan ($5.15 billion) from 33.11 billion yuan a year earlier. The latest profit was better than the average forecast of 33.70 billion yuan of four analysts surveyed by Dow Jones Newswires.

ICBC's net interest income fell 13% to 57.75 billion yuan, though loans rose 14%, or 636.4 billion yuan, from the end of last year, exceeding its full-year target of 530 billion yuan.

Income on foreign-exchange assets was a big driver of ICBC's rise in profit in the first quarter, said Lee Yuk-kei, an analyst at Core Pacific-Yamaichi International, in Hong Kong. ICBC reported 831 million yuan in net income on foreign-exchange assets in the first quarter, against a 3.36 billion yuan net loss a year earlier.

In addition, ICBC's fee-based income rose 9.7% in the first quarter to 13.55 billion yuan because of a 30% surge in China's stock market in the period.

Analysts say that how ICBC and the nation's other banks perform for the full year will depend in part on whether Beijing intends to keep up the lending momentum. Beijing has encouraged big banks like ICBC to lend funds to jump-start the economy.

New yuan loans surged to 4.58 trillion yuan in the first quarter, equivalent to more than 90% of the central government's minimum target for the full year.Though analysts expect lending growth to slow over the rest of the year, they said China's banks will likely extend seven trillion yuan of new loans this year, up 22% from the end of last year.

—Rose Yu

Write to Jason Leow at jason.leow@wsj.com

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ICBC Net Edges Up as Stake-Sale Worry Casts Cloud Over Solid Growth Potential

• APRIL 28, 2009

JASON LEOW

SHANGHAI -- Industrial & Commercial Bank of China Ltd., the world's largest lender by market value, reported a 6.2% rise in first-quarter net profit, as higher fee-based income and gains in foreign-exchange holdings helped offset a drop in net interest income.

The fall in net interest income, a key source of profit for China's banks, reflects the challenges the banks face as the domestic economy slows. China's central bank cut the benchmark one-year lending interest rate by 2.16 percentage points in the second half of last year, to help boost the cooling economy.

With recent signs of a recovery in China's economy, analysts expect banks' growth to improve in the coming quarters. "From the perspective of profit growth rate, the first quarter may have been the low point in this cycle for China's banks," said Wang Qian, an analyst at Industrial Securities Co., of Shanghai.

"Concerns that foreign investors will likely sell part of their stakes in the bank have been hanging over ICBC. On Tuesday, Allianz SE and American Express Co. said they sold half of their stakes in ICBC in a private placement as the lockup period on them had expired. The lockup on the other half of their holdings expires on October 20.

Allianz now owns a 0.97% stake in ICBC and American Express 0.2%. Goldman Sachs Group Inc., another foreign investor, holds 4.93% in ICBC and has pledged a new lockup commitment covering 80% of those shares. It will be free to sell 20% of its stake after Tuesday."

For the first period, ICBC said its net rose to 35.15 billion yuan ($5.15 billion) from 33.11 billion yuan a year earlier. The latest profit was better than the average forecast of 33.70 billion yuan of four analysts surveyed by Dow Jones Newswires.

ICBC's net interest income fell 13% to 57.75 billion yuan, though loans rose 14%, or 636.4 billion yuan, from the end of last year, exceeding its full-year target of 530 billion yuan.

Income on foreign-exchange assets was a big driver of ICBC's rise in profit in the first quarter, said Lee Yuk-kei, an analyst at Core Pacific-Yamaichi International, in Hong Kong. ICBC reported 831 million yuan in net income on foreign-exchange assets in the first quarter, against a 3.36 billion yuan net loss a year earlier.

In addition, ICBC's fee-based income rose 9.7% in the first quarter to 13.55 billion yuan because of a 30% surge in China's stock market in the period.

Analysts say that how ICBC and the nation's other banks perform for the full year will depend in part on whether Beijing intends to keep up the lending momentum. Beijing has encouraged big banks like ICBC to lend funds to jump-start the economy.

New yuan loans surged to 4.58 trillion yuan in the first quarter, equivalent to more than 90% of the central government's minimum target for the full year.Though analysts expect lending growth to slow over the rest of the year, they said China's banks will likely extend seven trillion yuan of new loans this year, up 22% from the end of last year.

—Rose Yu

Write to Jason Leow at jason.leow@wsj.com

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American Express, Allianz sell ICBC H-shares at discount

HONG KONG, April 28 (Reuters) - Allianz <ALVG.DE> and American Express <AXP.N> sold shares in Industrial and Commercial Bank of China <1398.HK><601398.SS> at 4 percent discount to the Monday closing price of the Chinese lender.

Allianz and American Express had sold the ICBC H-shares at HK$3.86 per share, compared with the closing price of HK$4.02 on Monday, a source with direct knowledge of the deal said on Tuesday.

Allianz sold 3.22 billion ICBC H-shares and American Express sold 638.06 million shares to a select group of investors through private sales, ICBC said in statements.

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American Express sells half its ICBC shares

April 27 (Reuters) - American Express Co <AXP.N>: * American Express and ICBC announce the completion of ICBC shares transfer

through a private sale * Says it has sold its 638,061,116 shares of Industrial And Commercial

Bank of China [icbaf.ul] to a select group of investors through a private

sale * Says it continues to hold 638,061,117 h shares in ICBC

((New York Equities Desk; tel: +1 646 223 6000))

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ICBC

 Industrial and Commercial Bank of China <1398.HK><601398.SS> 
on Tuesday said Allianz <ALVG.DE> and American Express <AXP.N> 
had sold shares in the Chinese lender. 
    The stock fell 5.9 percent on Monday in anticipation of 
strategic investor exits when the lock-up on a portion of its 
shares expires on Tuesday. 
    "Some of the overhang from the share sale may be removed but 
the stock may not find any respite today after the bank 
disappointed with its Q1 earnings, particularly the new interest 
income was lower than expected," said Conita Hung, head of equity 
markets with Delta Asia Securities. 
    ICBC <1398.HK>, the world's biggest bank by market value, 
posted a 6.2 percent increase in first-quarter profit on Monday 
due to loan growth and higher fees, but investors were 
disappointed with the 12.9 percent drop in its net interest 
income.      

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Allianz, American Express unload ICBC H-shares

HONG KONG, April 28 (Reuters) - Industrial and Commercial Bank of China <1398.HK><601398.SS>, the world's biggest bank by market value, said on Tuesday Allianz <ALVG.DE> and American Express <AXP.N> had sold shares in the Chinese lender.

Allianz sold 3.22 billion ICBC H-shares and American Express sold 638.06 million through private sales, ICBC said in statements.

Allianz holds 3.87 percent of ICBC's H-shares after its share sale and American Express continues to hold 638.06 million, the bank added.

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China's ICBC says its deposits now world's largest

Business times 14 Apr 2009

SHANGHAI - The Industrial and Commercial Bank of China, already the world's most profitable lender and the largest bank by market capitalisation, said its deposits have also topped global counterparts.

ICBC's customer deposits reached 8.9 trillion yuan (US$1.30 trillion) at the end of the first quarter, rising 950 billion from the beginning of this year, it said in a statement late on Monday.

Its total deposits would be 9.8 trillion yuan if interbank deposits were also included, compared with US$1.01 trillion of deposits at JPMorgan Chase, the US bank with the largest deposits, ICBC said.

'In recent years, assets and deposits of European, American and Japanese banks have risen sharply due to mergers and acquisitions of major banks,' it said in the statement.

'In contrast, ICBC's expansion has largely been propelled by the domestic market,' and that reflected the development of China's economy and financial industry, it said. -- REUTERS

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American Express may sell ICBC; Goldman Sachs to hold on

NEW YORK, March 25 (Reuters) - American Express Co <AXP.N> said it may sell its stake in Industrial and Commercial Bank of China <1398.HK> <601398.SS>, worth more than $600 million, while Goldman Sachs <GS.N> may sell up to 20 percent of its stake in the Chinese bank.

The announcements come as U.S. financial institutions face renewed pressure to reduce their risk and shore up their balance sheets.

American Express, the fourth-largest U.S. credit card issuer, and Goldman Sachs, the fifth-largest U.S. bank, have recorded massive drops in profits as credit losses and writedowns have surged.

Goldman Vice Chairman Michael Evans, who appeared at ICBC's 2008 earnings media conference in Beijing, said the Wall Street firm does not need to raise cash and would not use the partial sale of its ICBC stake to repay funds it owes to the U.S. government.

"Goldman Sachs does not need to raise cash as a firm," Evans said.

Reports in U.S. newspapers earlier this week said Goldman was looking to sell part of its ICBC stake as soon as next month.

Goldman said it agreed to hold onto at least 80 percent of its stake through April 28, 2010, leaving it free to sell up to 20 percent.

Prior to the new agreement, Goldman would have been eligible to sell half its ICBC shares on April 28, 2009, and the other half on Oct. 20, 2009.

Goldman's investment in ICBC, including stakes held by Goldman-managed investment funds, is worth about $8.75 billion and amounts to 4.93 percent of the Chinese bank's stock.

American Express' holding represents 0.38 percent of ICBC's outstanding shares. American Express can sell half its shares on April 28 and the other half on Oct. 20, 2009. The credit card company said it will consider selling its stake at some point after the lockup period, depending on market conditions. American Express will look to minimize the market impact and maximize proceeds from the sale, potentially through a private deal with investors.

ICBC and American Express intend to continue their partnership, they said.

Goldman, German insurer Allianz <ALVG.DE> and American Express invested $3.78 billion in ICBC in 2006, giving the consortium a total stake of about 9 percent. (Reporting by Dan Wilchins, editing by Maureen Bavdek and John Wallace) ((Reuters Messaging: dan.wilchins.reuters.com@reuters.net; +1 646 223 6320)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134

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ICBC 1398

HONG KONG, March 26 (Reuters) - Shares in Industrial and Commercial Bank of China jumped 12 percent in Hong Kong on Thursday after Goldman Sachs <GS.N> pledged to extend the lockup on most of its stake in the state-run bank.

ICBC <1398.HK><601398.SS>, the world's most valuable bank, also reported flat fourth quarter net profit late on Wednesday, in line with market forecasts.

ICBC shares rose to HK$4.01 in early Thursday trade to an 11-week high after Goldman Sachs said it would not sell 80 percent of its nearly 5 percent holding in ICBC before April 2010. Previously it could sell half the stake next month and the other half in October.

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