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August 21, 2008

Bank of China reports 57% rise in profits


by Kay Murchie
”Bank

Industrial & Commercial Bank of China (ICBC) has become the world’s most profitable bank after it reported a 57% rise in half-year profits.

The bank, which is the largest in China, made 64.5 billion yuan (£5.01 billion, US$9.4 billion) in the six months to the end of June and easily outperformed its rivals worldwide, particularly in the US and Europe, who are currently announcing write-downs as a result of the credit crunch.

The bank, which has a market capitalisation of $235 billion, said it has a $1.9 billion book of US mortgage-backed investments and has set aside $702 million for impairments on these assets.

HSBC previously held the accolade as the world’s most profitable bank but ICBC beat a $7.7 billion (£4.13 billion) interim net profit at the British banking giant.

ICBC has announced plans to open branches in Sydney and New York and has bought stakes in South Africa’s Standard Bank Group and Macau’s Seng Heng Bank.

Finally, ICBC holds $2.7 billion worth of bonds in troubled US mortgage institutions, Freddie Mac and Fannie Mae, but confirmed that just 0.09% of its total assets were linked to the US sub-prime mortgage market.

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