Industrial & Commercial Bank of China Ltd earned a record 64.5 billion yuan ($9.42 billion) in the first half to become the world's most profitable bank as a focus on domestic lending helped it avoid the global credit crisis.
Net income rose 57 per cent, the Beijing-based bank said in a statement today, topping the $7.72 billion earned by closest rival HSBC Holdings Plc. Earnings per share rose to 0.19 yuan.
Chairman Jiang Jianqing has more than doubled ICBC's profit since 2005 as annual economic growth of more than 10 per cent bolstered corporate loans and services to the nation's growing number of wealthy people.
ICBC's domestic bias shielded it from the US sub-prime crisis that has led to more than $500 billion of writedowns and losses at financial institutions globally.
“This shows the rise of economic power in China,” said Yuk Kei Lee, an analyst at Core Pacific-Yamaichi International in Hong Kong. “ICBC's earnings power has already overtaken other global giants but we need time to see if this achievement can be sustained.”
The shares closed 2.9 per cent lower in Hong Kong today. ICBC's Hong Kong shares trade at about 2.5 times analysts' consensus estimates for book value, compared with 0.84 times for Citigroup Inc and 1.46 times for HSBC's Hong Kong-traded shares.