Top China bank ICBC, world’s largest, reports jump in property bad debt

Beijing, Aug. 30 (BNA) The Industrial and Commercial Bank of China (601398.SS), the world’s largest commercial lender by assets, said that non-performing lending to the real estate sector in the first half of this year rose by 15%.

The bank reported 38.8 billion yuan of non-performing loans (NPL) at the end of June, compared with 33.8 billion yuan at the end of last year, according to a first-half earnings report on Tuesday.

According to Reuters, this means the real estate sector’s non-performing loan ratio is 5.47%, compared to the bank’s average of 1.41%.

The lender is the third-largest Chinese bank to report rising bad debts in the real estate sector, amid a dismal first half in which rising default rates for developers halted housing projects, leading to a mortgage boycott.

Despite this, Industrial and Commercial Bank of China net profit grew 4.9% year-on-year in the first half of this year.

Profits amounted to 171.5 billion yuan ($24.82 billion) in the six months to June, the bank said in a statement on Tuesday, compared with 163.47 billion yuan in the same period a year earlier.

Reuters calculations show that the data indicates a second-quarter net profit of 80.9 billion yuan, up 4% from a year earlier.

The bank said net interest margin – a key indicator of banks’ profitability – stood at 2.03% at the end of June, compared to 2.10% at the end of March.

It reported a non-performing loan ratio of 1.41% at the end of the second quarter compared to 1.42% at the end of the previous quarter.

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