ICBC, BoCom show weak profit growth on falling interest income

Major Chinese banks posted slightly higher first-half profits due to rising bank lending amid falling interest income, the Wall Street Journal reported. Industrial and Commercial Bank of China (ICBC) said first-half profits grew 2.9% year-on-year to US$9.72 billion; in 2008, the bank posted first-half profit growth of 57%. Interest income, which makes up 80% of the bank’s operating income, fell 12% as the bank issued more than US$126 billion in new loans. Bank of Communications said profits rose to US$2.28 billion from US$2.27 billion a year earlier. Interest income fell 9.8% to US$4.36 billion. High lending growth has raised fears of a possible non-performing loan crisis, but ICBC officials said the bank’s asset quality would continue to improve as loan growth slowed in the second half.