Chinese banks optimistic as economy stabilizes

THE Industrial and Commercial Bank of China, the country's largest, plans to lift lending this year while the Bank of China predicts it will defend its margin, demonstrating optimism as the economy stabilizes.

The outlook is improving and bad loans will remain stable, ICBC Chairman Jiang Jianqing said in Beijing yesterday. BOC, the fourth-biggest by assets, is seeking to keep lending profitability stable as borrowing by smaller firms helps offset pressure from liberalization of rates, Chairman Xiao Gang said.

Combined net income at Chinese banks rose 19 percent last year to 1.24 trillion yuan (US$199 billion), the China Banking Regulatory Commission said last week.

"The market is generally optimistic about Chinese lenders," Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp, said yesterday.

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