Industrial & Commercial Bank of China is expected to report a 1.4% decline in net profit to 92.99 billion yuan ($12.71 billion) for the three months ended Sept. 30, according to analysts polled by Visible Alpha. This marks a decrease from the net profit of CNY94.32 billion recorded in the same period last year.
Key Metrics to Monitor
1. Interest Income
The first-half net interest income of Industrial & Commercial Bank of China showed a 3.9% decrease from the previous year, amounting to CNY336.99 billion. This decline can be attributed to the falling loan interest rates in the country. Investors are keen on observing any further declines in the bank’s primary source of earnings.
2. Loan Quality
The overall nonperforming-loan ratio of the bank improved to 1.36% at the end of June, compared to 1.38% at the end of 2022. However, the ratio for corporate real-estate loans at its domestic branches increased to 6.68% from 6.14%. Investors are closely monitoring any changes in the quality of assets, particularly for crucial sectors like real estate.
3. Credit Costs
In the first half, impairment losses on assets decreased by 8.7% year-on-year, amounting to CNY122.255 billion. As the domestic economy continues to recover from the pandemic-related slump and associated restrictions, investors are paying attention to credit costs.