ICBC second quarter profits jump 41%

Industrial and Commercial Bank of China (ICBC) saw a whopping 41% increase in second quarter profits, but analysts believe the bank will struggle to maintain this strong performance in coming months, Reuters said. ICBC, the world’s biggest bank by market value, was helped by widening interest margins and fee income growth. However, analysts say the risk of loan defaults by borrowers in key sectors such as small- and mid-sized businesses and real estate may rise due to the weakening global economy. As such, non-performing loans at ICBC and other Chinese banks are expected to rise in the second half. ICBC said its subprime-related holdings in the West amounted to US$1.92 billion and it had made allowances for US$702 million in losses on these holdings. It also holds US$2.7 billion in bonds related to US mortgage agencies Fannie Mae and Freddie Mac. The bank’s total market capitalization is US$235 billion.