ICBC 1398

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Slowdown hits ICBC

Industrial & Commercial Bank of China (1398), the world's largest lender by assets, reported its biggest jump in bad loans since at least 2006 as the property market dipped and the economy cooled.

Nonperforming loans rose 9 percent in the third quarter from the previous three months, the Beijing-based bank said yesterday. Net income gained 7.7 percent from a year back to 72.4 billion yuan (HK$91.86 billion).

A struggling mainland economy is poised to drag the company to its weakest full-year profit growth since at least 2001 as more borrowers default.

Challenges at home may spur the bank to boost overseas expansion.

"ICBC remains under pressure as bad loans in China continue to rise," said Zheng Chunming, a Shanghai-based analyst at Capital Securities."The operating environment for companies is getting more difficult as China's economy faces downward pressure."

ICBC's nonperforming loans rose to 115.5 billion yuan in September from 105.7 billion yuan in June. The gain was the biggest since quarterly data became available with the bank's 2006 listing.

Nonperforming credit accounted for 1.06 percent of total advances.

China's economy may grow 7.4 percent this year, the least since 1990, amid a property slowdown.

Operations outside the mainland accounted for 7.1 percent of assets as of June, up from 6 percent a year earlier.

ICBC set aside 8.2 billion yuan of provisions against potential soured credit, up 30 percent from 2013.

"Provision charges will be the biggest swing factor for banks' earnings," said Mu Hua, a Guangzhou- based analyst at GF Securities.

"The more bad loans they write off, the more additional provisions they need to set aside to maintain the required coverage ratio."

ICBC's full-year profit may grow 5percent this year, the least in data stretching back to 2001, Bloomberg data show.

Source: BLOOMBERG

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Shares of ICBC (1398) have risen 28 percent in the past year.

But they are still trading at just 5.9 times historical earnings with a 5.8 percent yield.

Near HK$5.40 they are a bargain.

Source: Dr Check, The Standard HK

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vested

ICBC cooperates with UnionPay, VISA to launch cloud payment credit card

ICBC (01398.HK) -0.170 (-2.541%) Short selling $114.19M; Ratio 4.334% cooperated with UnionPay and VISA to launch HCE cloud payment credit card, which is equivalent to the supplementary card.

The card holders can use the NFC-enabled Android phones to finish their payment via the mobile app.

Source: AAStocks Financial News

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ICBC (01398.HK) credit policy favors 'One Belt, One Road' projects

Mr. Yi Huiman, the president of ICBC (01398.HK) -0.170 (-2.541%) Short selling $114.19M; Ratio 4.334% , mentioned that the bank will provide more sources and policy supports to the credit orientation, authorization and innovation in "One Belt, One Road", Financial Times reported.

More renminbi will be utilized in the projects.

Currently, ICBC has 120 branches in the 18 countries along the "One Belt, One Road" regions. More than 130 major projects are prepared with the aggregate investment amount of US$158.8 billion.

Source: AAStocks Financial News

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ICBC (01398.HK) Earns Highest Profit among Companies on 'Fortune' Global 500 List

The magazine "Fortune" updated its Global 500 list.

ICBC (01398.HK) +0.050 (+0.898%) Short selling $12.58M; Ratio 2.534% , with a profit of US$44.76 billion, became the most profitable company on the list.

Apple ranked the second with a profit of US$39.51 billion. CCB (00939.HK) +0.050 (+0.769%) Short selling $33.70M; Ratio 6.226% earned US$36.976 billion, securing the third place.

Source: AAStocks Financial News

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vested

ICBC (1398), the mainland's largest bank, hit HK$5.21 on Monday, its lowest level this year.

The share is now trading at 5.4 times historical PE with 6 percent dividend yield and a price to book ratio of 0.97 times.

Unreasonably cheap.

Source: Dr Check, The Standard

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ICBC (01398.HK)'s Latest Ratings & Target Prices (Table)

ICBC (01398.HK)'s latest ratings and target prices given by 11 brokers after the bank's release of results:

Broker / Investment Rating / Target Price (HK$)
HSBC / Buy / 9.8->9.5
BNP Paribas / Buy / 9
Morgan Stanley / Overweight / 8.7
Citigroup / Buy / 7.8
Deutsche Bank / Buy / 7.62
Macquarie / Outperform / 7.42
Nomura / Buy / 7.31
JP Morgan / Overweight / 7
BofA Merrill Lynch / Buy / 6.6->6.25
BOCOM Int'l / LT Buy / 7.06->6.1
Daiwa / Outperform / 5.6

Source: AAStocks Financial News

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vested

<Research Report>HSBC Maintains ICBC(01398.HK) at Buy with Target Cut to $9.5

HSBC pointed out that ICBC(01398.HK)'s profit in the second quarter stayed flat on a yearly basis, slightly lower than the 1% increase recorded in the first quarter.

That was mainly attributable to the contraction of NIM and the increased credit costs.

The broker liked that the bank's 2Q net fee income rose 12%, the cost to income ratio decreased, the risk weighted assets to total assets ratio fell and its Tier-1 ratio is leading in its sector.

Assuming the exchange rate changes, HSBC trimmed ICBC's target price from $9.8 to $9.5 and kept the rating at Buy.

Source: AAStocks Financial News

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vested

Temasek Buys 30M ICBC (01398.HK) H Shares; Shareholding Rises to 10%

Temasek purchased 30 million H shares of ICBC (01398.HK) -0.130 (-2.778%) Short selling $69.43M; Ratio 4.231% at the average price of $4.696 per share on 21 September 2015, involving an amount of $141 million, according to the information from HKEX. After the transaction, its shareholding in ICBC has increased from 9.97% to 10%.

Source: AAStocks Financial News

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<Post-Result>Brokers' Latest Ratings, TPs on ICBC (01398.HK) (Table)

ICBC (01398.HK) announced the third quarter results as of the end of September.

Its net profit edged up 0.52% yearly to RMB72.74 billion, with EPS of RMB0.2.

Its net interest income amounted to RMB127.858 billion, up 2.02% yearly.

Its net fee and commission income increased by 23.16% to RMB34.063 billion.

Our website summarized the bank's updated investment ratings and target prices issued by eight security brokers:

Broker / Investment Rating / Target Price (HK$)
HSBC / Buy / 9.5
Bernstein / Outperform / 8.5
Nomura / Buy / 7.31
JP Morgan / Overweight / 7
Deutsche Bank / Buy / 6.9
BNP Paribas / Buy / 6.3
Credit Suisse / Neutral / 5.6
Macquarie / Outperform / 5.29

Source: AAStocks Financial News