ICBC posts 19% profit rise in 3Q on loan growth

Industrial and Commercial Bank of China (ICBC) posted a 19% rise in third-quarter profit thanks to this year’s strong loan growth, the South China Morning Post reported. However, analysts said that a reduction in loan growth next year as Beijing gradually moves toward a tighter monetary policy could hurt profitability in 2010. ICBC posted profits of US$4.92 billion in the July-September period, up from US$4.13 billion in the same period last year. Despite the strong year-on-year figures, loans and advances rose just 2.6% in September from the previous month, much slower than the 19% growth in the first half. A combination of slowing loan growth and shrinking margins following interest rate cuts in the last year could dampen results in 2010, but analysts said a recovery in interest margins could see loan growth translate into earnings growth.