April 28 - Industrial and Commercial Bank of China Limited (601398.SH, HK: 1398) announced its results for the first three months ending 31 March 2011. In accordance with the International Financial Reporting Standards, ICBC's net profit in the first three months of 2011 was RMB 53.836 billion, up 29.03% over the same period last year. Net assets per share and earnings per share were RMB 2.50 and RMB 0.15 respectively. Annualized return on average assets and return on weighted average equity rose respectively 0.18 percentage points and 1.58 percentage points from a year earlier, to 1.55% and 25.44%.

ICBC continuously enhanced the strength of its risk control capabilities and maintained good asset quality amid fast and stable growth on the business performance. In the first quarter this year, ICBC's bad loan balance and ratio registered "both decline" on top of "both declined" in its eleventh year. Bad loan rate moved down to 1.00% at the end of the first quarter, down 0.08 percentage point over the end of 2010. Meanwhile, provision coverage rate surged 18.33 percentage points further over the end of 2010 to 246.53% by the end of the first quarter. ICBC has the highest provision coverage rate among the banks that can be compared, a clear indication of the Bank's stable operation. Besides, ratio of provision balance to total loan rose 0.01 percentage point to 2.47% from the beginning of the year.

Beginning from the year, ICBC maintained a rational pace in providing loans while at the same time placing keen eye on the adjustment of its loan portfolio. In the January to March period, RMB loans in domestic branches increased RMB 210.516 billion steadily, or 3.39%. In extending credit, ICBC kept tight control in releasing loans of mid-to-long term. Property lending has been edged down 10.3 percentage points when compared to the same period last year. One salient point was the great support from ICBC to small-and-medium enterprises in the first three months of this year, especially the financial services and small business loans. At the end of the first quarter, ICBC balance of small business loans moved up RMB 53.5 billion from the beginning of the year, accounting for 35.7% of the increase in all corporate loans. Small business loans rose 11.6% or 8.2 percentage points higher than average increase of all loans.

ICBC took measures to adjust its liability structure while credit structure continued to improve, bringing coordinated healthy growth to deposit business. In terms of total deposits, ICBC remained as the world's No.1 commercial bank by having a balance of customer deposits of RMB 11.76 trillion, up RMB 618.867 billion from the end of the previous year. Besides, ICBC also stepped up the coordinated growth between deposit business and wealth management business, in an effort to better meet the diversified wealth management needs of the customers.

In terms of intermediary business, ICBC secured the top spot in most of the emerging areas through faster product and service innovation to realize the transformation and optimization of income structure and business development. In the first quarter this year, ICBC registered a net income of RMB 25.927 billion from banking charges and commission, a growth of 42.02% over the same period last year, accounting for 22.86% of the operating income and 1.86 percentage points higher year-on-year. Income from investment banking, totaling RMB 6.71 billion, became one of the most important income sources of intermediary business. ICBC has issued 66.66 million credit cards and took top positions in the domestic league table in terms of card issuance volume, cardholder expenditure volume and overdraft volume. Over 100 million of personal internet banking users and more than 60% of transactions going through the electronic banking helped ICBC defend its dominance as being No.1 electronic banking in China. In terms of bond underwriting, ICBC remained the house to beat by underwriting 35 debt instruments - short term bonds, mid-term notes and ultra short term bonds, to a total of RMB 88 billion or a year-on-year increase of 98.6%. Strong momentum in precious metal business was witnessed by more than 20,000 tons of precious metal sold in the first quarter, tantamount to the transaction volume in 2010 and one important growth point in intermediary business.

Meanwhile, ICBC sharpened its competitive edge in providing diversified services in different markets, driving the coordinated growth of business and income from domestic to overseas, from conventional commercial banking to integrated financial services. In January 2011, the five branches of ICBC in Europe - Paris (France), Brussels (Belgium), Amsterdam (Holland), Milan (Italy), and Madrid (Spain) were officially opened to business. Worthy of note was that, ICBC leveraged its IT strength to incorporate business operation, risk management and information sharing under one global platform. Nine product service lines have been extended overseas, namely, global cash management, bank card, electronic banking, fund clearing, trade finance, asset management, investment banking, professional financing and retail banking. FOVA (foreign subsidiaries operation management system), a system independently developed by ICBC, has been installed in 90% overseas subsidiaries, a significant boost to ICBC's capacity and competitiveness in serving the customers around the world.