Industrial & Commercial Bank of China (601398) Ltd. posted a 29 percent increase in net income yesterday to a record $17 billion, pushing combined profits of the nation’s biggest banks to $57 billion.Bank of America Corp. (BAC) and Edinburgh-based Royal Bank of Scotland Group Plc posted losses as the U.S. economic recovery weakened and Europe’s debt crisis deepened.
China’s banks have increased profits as the world’s second- largest economy sustained growth of more than 9 percent, helped by a record credit boom that powered its rebound from the global recession. The earnings reports and a drop in bad debts may boost investor confidence after bank shares fell this year on concern that $1.7 trillion of local government liabilities may lead to a wave of defaults.
“Shares of Chinese lenders are in a better position to rebound than U.S. banks,” Ronald Wan, a Hong Kong-based managing director at China Merchants Securities (Hong Kong) Co., said by phone. “In the second half, the market will still be concerned about asset quality and fund-raising issues” for banks globally.
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