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2026-11-02 15:42:50 Citi published a research report stating that ICBC (01398.HK)'s 3Q results beat expectations, benefiting from moderate credit costs. The bank's pre-provision operating profit for the first nine months rose 11.4% YoY to RMB491.3 billion, while profit increased 5.8% YoY to RMB285.6 billion, equivalent to 75% of full-year market expectations. Pre-provision operating profit for 3Q rose 11.2% YoY to RMB156.6 billion, supported by a low base for NIM and resilient loan growth, though partly offset by softer fee income and trading gains; 3Q profit rose 10% YoY to RMB112 billion, affected by a higher effective tax rate. On the positive side, loans in 3Q increased 1% QoQ and 6.1% YoY, with corporate loans rising 6.6% YoY while retail loans fell 1.8% YoY; deposits rose 1.5% QoQ and 6.6% YoY, while the loan-to-deposit ratio fell 0.4 ppts QoQ to 81.3%. NIM remained flat QoQ at 1.29%, while the cost-to-income ratio fell 1.1 ppts YoY to 29.1%. In terms of asset quality, the non-performing loan ratio remained flat QoQ at 1.29%, while 3Q credit costs were 0.3% (flat YoY), and the non-performing loan coverage ratio was 211.6%. Negative factors included a 3.4% YoY decline in fee income, slower YoY growth in trading gains to 5.8%, and a 2.5 ppts YoY increase in the effective tax rate to 16.3%. The bank expected the share price to react positively, as 3Q earnings growth exceeded expectations and ranked third among large banks. Management indicated that maintaining strong revenue growth in 2027 would be challenging due to continued pressure on NIM compression, potentially narrowing non-interest income growth, and ongoing uncertainties in asset quality. The bank maintained its Buy rating on ICBC H shares with a TP of HKD8.97. (da/ad)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |