ICBC's 2009 total loan growth fastest in 3 years

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Industrial & Commercial Bank of China (ICBC) said its total loans grew last year at the fastest rate since its IPO, reflecting a broader lending boom fuelled by Beijing's massive economic stimulus package.

Yang Kaisheng, ICBC's president, said on Sunday that total outstanding loans stood at 5.31 trillion yuan (USD 778 billion) at the end of 2009, up 16.2% from a year earlier and the fastest growth rate since the bank went public in 2006, according to Reuters calculations.

Chinese banks made a record 9.6 trillion yuan (USD 1.406 trillion) in new loans last year, fuelling concerns that they were sowing the seeds of a new crop of bad debts down the road.

"From the perspective of credit management, the deposit-to-loan ratio stands at a relatively healthy level," Yang told a media briefing in Beijing on the sidelines of the Chinese People's Political Consultative Conference.

The China Banking Regulatory Commission (CBRC) has been pressing lenders to replenish their capital base after last year's surge in lending, and a number of banks are in the process of raising fresh equity or selling bonds.

ICBC, China's largest bank by market value, expects its net interest margin to be relatively stable in 2010, Yang said.

Analysts expect net interest margins for Chinese lenders to rise in 2010, after they declined for the most part of 2009.

"This year, net interest margins will reverse the downward trend seen in the first half of 2009," Yang said.

Yang also said the bank's coverage ratio was "well above" 150%, the legal requirement by China's banking watchdog, adding that the bank's capital adequacy ratio is the highest among the major Chinese lenders.

Last week, Yang said that the bank was not facing pressure to raise new capital, even as many of its peers announce plans for new fundraising to bolster their balance sheets.

The People's Bank of China raised the level of reserves banks must hold for the second time this year on the eve of its New Year holiday last month, sending clear messages to banks that it wants more reasonable bank lending and it is paying close attention to inflation.

ICBC, with a market value of about USD 240 billion, is due to report its fourth-quarter earnings sometime in late March.