China's ICBC Poised as World's Most Profitable Bank: Week Ahead

China's ICBC Poised as World's Most Profitable Bank: Week Ahead

By Eugene Tang

Aug. 18 (Bloomberg) -- Industrial & Commercial Bank of China may report at least a 50 percent increase in first-half profit this week, putting it on course to overtake HSBC Holdings Plc as the world's most profitable bank.

ICBC's net income may rise more than 50 percent in the first six months, from last year's 40.8 billion yuan ($5.9 billion), the Beijing-based bank said on July 3. That would surpass HSBC's $7.7 billion first-half profit, putting the Chinese bank on course to earn $17.6 billion in net income this year.

Bank chairman Jiang Jianqing said in a June interview that he wanted ICBC, already the world largest bank by value, to become the most profitable lender after three years. Jiang, 55, may be able to reach his goal earlier because a local economy that's grown more than 10 percent for 10 consecutive quarters created demand for loans, and his bank evaded the U.S. credit crisis that dented the earnings of global competitors.

ICBC is scheduled to report its half-yearly earnings at 6:30 p.m. in Beijing on Thursday.

Jinduicheng Molybdenum Co., Asia's largest producer of the metal used in hardening steel, is scheduled to report first-half earnings on Wednesday. China Petroleum & Chemical Corp., or Sinopec, Asia's largest oil refiner, will report earnings Friday.

Beijing Olympics

The U.S. has regained the top of the medals tally at the Beijing Olympic Games, after a weekend of competition where 64 medals were up for grabs.

The U.S. team has won 19 golds, 21 silvers and 25 bronzes for a total of 65 since the 2008 Summer Games began on Aug. 8. With another week of competition to go, China is in second place with 35 golds, 13 silvers and 13 bronzes for a total of 61. Russia is third with 31: 7 golds, 12 silvers and 12 bronzes.

Chinese hurdler Liu Xiang, gold medal winner at the 2004 Athens Olympics, is under intense pressure to repeat his victory at about 9:45 p.m. on Thursday during the finals of the 110 meter hurdles.

Dayron Robles of Cuba, who toppled Liu's 2004 world record in June, may rain on the Chinese hurdler's parade. Liu said Robles was the stronger runner between the two, according to an Aug. 13 post on his personal Web site.

Government bonds rose last week, after the finance ministry auctioned at least 24 billion yuan of seven-year debt on offer at lower yields than forecast in a Bloomberg survey. The notes were sold at a yield of 4.23 percent compared with the 4.27 percent median estimate.

Stocks, Yuan

The yield on the 4.01 percent note due May 2015 fell 4 basis points to 4.22 percent, the lowest since July 7, according to the China Interbank Bond Market. The price rose 0.23 per 100 yuan face amount to 98.77. A basis point is 0.01 percentage point.

Chinese stocks tumbled on concern higher raw-material costs will erode earnings. The benchmark CSI 300 stock index plunged 5.6 percent last week to a 17-month low of 2,447.61. The measure has fallen 54.2 percent this year, the worst performer out of 88 indexes tracked by Bloomberg analytics.

The yuan weakened 0.12 percent last week to 6.8669 against the U.S. dollar, a fourth week of losses and the longest streak since July 2005. Traders were concerned that China's monetary authority is curbing gains to bolster exports and the economy.

The following is a list of important events in China this week:

Event
Olympic Games 18-24
China South Locomotive shares' Shanghai debut     18
China Southern Airlines first-half earnings       18
China Merchants Banks' first-half earnings        18
Zhuzhou Smelter's first-half earnings             18
China Oriental Group's first-half earnings        18
Citic Bank Corp.'s first-half earnings1           19
Industrial Bank Co.'s first-half earnings         19
Tianjin Port's first-half earnings                19
Shenzhen Development Bank's first-half earnings   19
Jinduicheng Molybdenum's first-half earnings      19
China South Locomotive shares' Hong Kong debut    20
Beijing Capital Airport's first-half earnings     20
China International Marine's first-half earnings  20
China State Shipbuilding's first-half earnings    20
ICBC's first-half earnings                        21
China Petroleum & Chemical's first-half earnings  22
Pudong Bank's first-half earnings                 22
Yangtze Power's first-half earnings               22
Datong Coal's first-half earnings                 22
China Construction Bank's first-half earnings     22
Guangzhou Shipyard's first-half earnings          22