The Industrial & Commercial Bank of China (ICBC) reported a steady net profit for the third quarter, with lower credit costs helping to offset weaker earnings from lending and other regular operations. The bank’s net profit for the three months ended September 30 was ¥94.93 billion ($12.98 billion), which was slightly higher than the estimate of ¥92.99 billion by Visible Alpha.
Decline in Net Interest Income
ICBC saw a 6.4% decline in net interest income, its primary source of earnings, compared to the same period last year. This decrease was primarily due to falling loan interest rates in China. Net fee and commission income also dropped by 13% to ¥25.77 billion.
Decreased Impairment Losses
On a positive note, impairment losses on assets decreased by 29% compared to the previous year, reaching ¥25.56 billion. This decline can be attributed to the ongoing recovery of the domestic economy from the pandemic-induced slump and related restrictions.
Improving Loan Portfolio
ICBC’s nonperforming-loan ratio improved to 1.36% at the end of September, compared to 1.38% at the end of 2022. Additionally, total loans and advances to customers increased by 11% to reach ¥25.782 trillion by the end of last year.