The Industrial and Commercial Bank of China (ICBC) said
yesterday it will see double-digit loan growth again this year,
despite a tighter credit policy.
"Full-year loan growth for last year was 10.8 percent," Jiang
Jianqing, ICBC chairman, told reporters after a ceremony marking
the bank's acquisition of Seng Heng Bank in Macao.
He expects the bank to maintain steady loan growth at the same
pace this year. It has posted 10 percent growth for the past five
years.
Jiang also said the intermediary business, a fresh income source
the bank is trying to develop, has grown rapidly. "We will not rely
just on loan growth."
Jiang confirmed that the bank has $1.2 billion in
subprime-related investment, all rated AA or above.
The bank will calculate its subprime provision prudently, he
said. The scale of provision for the fourth quarter will be more
than for the third, but profit will still increase by over 60
percent after the provision, Jiang said.
He did not comment on other mainland banks' exposure to the
subprime mortgage crisis. But he believes its direct impact on
mainland banks will be small.
ICBC recently acquired Macao's Seng Heng Bank (SHB) from
Sociedade de Turismo e Diversoes de Macau, a gaming business owned
by Stanley Ho.
ICBC bought a 79.9 percent holding in the bank for 4.68 billion
patacas. It is ICBC's second overseas acquisition after Indonesia's
Bank Halim.
"The SHB stake purchase constitutes an important strategic move
by ICBC to achieve an international presence, especially in the
Hong Kong-Macao-Zhuhai region," said Jiang. "The acquisition has
created strong synergy."
"SHB can act as a window for ICBC to capitalize economic growth
in the region," said Zhu Xiaoping, chairman and executive director
of SHB. He said ICBC will upgrade SHB's IT system and enhance its
risk management. Its wealth management and clearing and settlement
business will also be strengthened.
Patrick Huen, a shareholder and vice-chairman of SHB, said the
acquisition will give SHB access to the mainland market through
ICBC, which has the largest amount of deposits.
"While we can act as a platform for our clients from Portugal on
the mainland, ICBC will be able to reach European clients through
us," said Huen.
The bank's chairman said it will continue to acquire overseas
banks. "ICBC will follow our clients in going overseas," said
Jiang, adding that strategic importance and synergy are the bank's
top priorities in finding acquisition targets.
"We are not focusing on financial investment, so low valuation
is not a factor for ICBC's acquisition targets," said Jiang,
referring to the possibility of buying subprime-battered banks in
the US and Europe.
(China Daily January 29, 2008)
