Industrial and Commercial Bank of China has downplayed the impact of threatened US-imposed tariffs and instability in the Chinese property sector on its future performance, reporting steady third-quarter profits.
In its results call on October 30, the world’s largest bank by assets described the trade frictions between China and the US as being “well contained”, stating the impact of the US-China trade policies and tariff negotiations on corporate borrowers has been limited.
“Affected clients are mainly those with weak industrial chain resilience and thin profit margins. Borrowers engaged in US export businesses account for a low proportion of our corporate loan portfolio, and their reliance on the US market, is generally limited,” a bank spokesperson said.
“We have made the stress test and analysis for the tariff policies on the asset quality of corporate loans, and the impact will be limited.”
Donald Trump and Xi Jinping agreed at a summit in South Korea on October 30 to extend a tariff truce due to expire in November, roll back export controls and reduce other trade barriers.
Beijing has rolled back sweeping controls on rare-earth magnets in exchange for a US agreement to reverse restrictions on Chinese companies. Fentanyl-related tariffs on Chinese goods have been cut back, with China resuming purchases of soyabeans and other American agricultural products.
Additionally, ICBC said it was positive over the ongoing real estate crisis in China, even as recent data shows no end in sight to the country’s four-year-long downturn.
The bank stated that while the corporate real estate sector has been under pressure, in Q3 the bank’s portfolio remained stable, with CRE accounting for less than 3 per cent of the bank’s total loan portfolio. The bank said it maintains adequate loan loss provisions to fully cover potential risk.
New-home prices in 70 cities, excluding state-subsidised housing, dropped 0.41 per cent in September from August, the biggest decline in 11 months, according to data released by the National Bureau of Statistics and reported by Bloomberg.
In a recent research note, Kelvin Lam, senior China economist at Pantheon Macroeconomics, said the property market remains in the doldrums, with a recovery in prices unlikely until 2027.
While ICBC continues to track changes in property values, with policies designed to boost demand and consumption, the risk to mortgage asset quality is moderate, it said, with no signs of accelerated worsening.
The bank saw net profit increase by 0.52 per cent in the first nine months of the year, compared with the same period of 2024. Operating income increased 1.98 per cent in the same period.
ICBC outlined how it planned to increase fee-based income to continue growth, up by 0.6 per cent, with focus on both the capital markets and wealth management. In the corporate wealth management, personal wealth management and private banking space, income increased by 25 per cent, while pension business income increased by 43 per cent.