China’s ICBC to support stabilisation of property market

China's ICBC to support stabilisation of property market

The Industrial and Commercial Bank of China ( ICBC ) announced on Thursday ( Mar 28 ) that it would support efforts being made to stabilize the second-largest economy of the world.

The comments were made by Wang Jingwu, a vice president at the nation’s largest lender, at a press conference held a moment after its quarterly results were published. Wang did not specify the kind of aid ICBC may offer.

In spite of slowing economic growth, ICBC and Bank of Communications Co Ltd, which announced the first earnings reports for China’s five key state institutions, both reported lagging income rise in 2023.

The Agricultural Bank of China Ltd ( AgBank ), which announced its earnings on Thursday, posted a slightly sunnier 3.9 % increase in net profit for 2023.

Investors are unsure whether state-owned home firms will receive more support from banks than privately owned ones due to the volatility in China’s housing market, which started with policies intended to rein in designer debt.

Chinese officials are urging banks to speed up clearances of new funding to cash-strapped private developers, according to a report released earlier this week by Reuters, amid a reluctance by the lenders to increase their exposure to the ailing business.

ICBC” will cure home firms equally, irrespective of their ownership”, said Wang.

The Bank of Communications Co Ltd ( BoCom ), which posted a higher percentage of non-performing loans from property firms on Wednesday and issued warnings about risks to asset quality, was also interested in the sector and its issues.

” The strain on asset value control is important”, said Yin Jiuyong, BoCom’s vice chairman, adding that the banks” may step up risk control” of its property- sector related business.

At the end of last year, BoCom’s non-performing loan ratio increased from 2.8 % to 4.49 percent, which was higher.

AgBank claimed that the majority of its negative funding were caused by local government loan and the property market.


The failure of the real estate industry is expected to put pressure on institutions ‘ ability to maintain their asset quality and success this year.

” We believe failure in the house market and LGFV ( local government borrowing cars ) risks, together with subdued buyer demand, are likely to continue to weigh on Chinese banks ‘ performance in 2024″, said Elaine Xu, Director of Asia- Pacific Financial Institution, Fitch Ratings.

Banks and analysts predicted that the net interest margin ( NIM ) of ICBC, BoCom, and AgBank, a measure of profitability, will continue to decline in 2024.

For smaller lenders which rely more on property loans, 2024 looks more bleak, said Xu.

Small regional banks in economically underdeveloped regions that are under greater stress from the property sector could have the worst impact on their credit profiles in 2024, she added.