News In Review

18th - 30th April

  • Published 30 Apr 2009

Major state banks book first-quarter profit growth and Baidu's performance beats analyst estimates, while China's largest automaker sees earnings fall. Cross-straits economic ties are strengthened, urban unemployment rises and Beijing issues more local government bonds.

Profits banked in Q1Both the Industrial and Commercial Bank of China, the world’s largest bank by market capitalisation, and Bank of Communications, a Chinese lender part-owned by HSBC Holdings, reported growth in first-quarter profits as a rise in fee income offset the effects of the slowing economy. ICBC's net profit rose 6% year-on-year in Q1 to Rmb 35.15bn ($5.15bn, €3.93bn, £3.53bn), while BoCom posted net profits of Rmb 7.94bn, up 0.6% from a year earlier. ICBC, however, flagged growing pressure on net interest margins following a series of rate cuts by the People's Bank of China, the central bank. Total loans and advances to customers at ICBC in Q1 increased 13.9% to Rmb 5,200bn, while BoCom increased outstanding loans by 21% in the same period. Chinese banks extended a record Rmb 4,580bn in new loans in the first quarter, over three times more than in the same period a year earlier, raising worries over credit quality. Nevertheless, both banks reported that their bad loan ratios had fallen from a year earlier. It is thought that April loans will be more modest in comparison with those in the first three months. Both the banks' results beat those of China Construction Bank, which reported an 18.3% drop in net earnings over the period.

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