ICBC’s H1 Revenue Growth Remained Largely Steady Despite Mounting Challenges

Industrial and Commercial Bank of China reported 4.2% and 4.9% year-on-year growth in first-half total revenue and net profits respectively, slowing from the 6.5% and 5.7% growth in the first quarter. The results were largely in line to meet our full-year net profit growth forecast of 4.9% and we retain our fair value estimates of CNY 5 for the A shares and HKD 6 for the H shares. Positively, 4.2% revenue growth was flat from the first half of 2021 despite the economic challenges in 2022. This was attributable to accelerating loan growth and higher investment income during 2022, which helped largely offset the negative impact of falling net interest margin and subdued fee income growth. We expect ICBC’s second-half loan growth to remain strong as management noted the loan project reserve increased by 27% year on year to CNY 1.4 trillion.