Industrial & Commercial Bank of China Ltd., the world's biggest by market value, boosted second- half profit by 70 percent, while earnings growth at Bank of China Ltd. slowed on $1.3 billion of subprime writedowns.
ICBC, with more customers than Russia has people, posted net income of 40.5 billion yuan ($5.7 billion) in the six months ended Dec. 31. Bank of China had a 14 percent increase, to 26.7 billion yuan. Earnings were derived from full-year results released by the banks in Beijing today.
Increased lending and mutual-fund sales drove the gains, as China's fastest economic growth in 13 years spurred corporate borrowing and raised incomes. That hasn't prevented ICBC and Bank of China losing $216 billion of market value since Nov. 1, as an equity bubble deflated and the U.S. mortgage market collapse prompted investors to shun banks with subprime-infected holdings.
``Bank of China has been mostly bogged down by its exposure to subprime investment while ICBC has largely remained intact,'' said Fan Dizhao, who helps manage about $8.5 billion at Guotai Asset Management Co. in Shanghai, including ICBC shares.
Beijing-based Bank of China, with two-thirds the assets of its larger rival, posted subprime-related losses that were more than three times bigger than the $400 million reported by ICBC.
Lending Boom
No comments:
Post a Comment