Bocom and ICBC deliver slow profit growth while sounding more optimistic on outlook

Bank of Communications (Bocom), one of China’s top state-owned lenders, delivered a cautiously optimistic outlook for its business and the country’s economy even as it posted its slowest earnings growth since at least 2004.

Net profit at the Shanghai-based bank rose 0.7 per cent to 92.7 billion yuan (US$12.8 billion) in 2023, compared with 92.1 billion yuan in 2022, it said in a stock exchange filing on Wednesday, as China’s faltering economy weighed on earnings growth. This beat a consensus estimate of 89.2 billion yuan made by analysts polled by Bloomberg.

The year was dedicated to “consolidating our asset quality based on our hard work in the last three years”, said Liu Jun, president of Bocom. “Now, I can only tell you that the soil of asset quality under our feet is relatively solid.”

Operating income, primarily interest income and fees, climbed 0.3 per cent to 258 billion yuan from 257.3 billion the previous year. The lender is distributing 27.8 billion yuan in dividends for 2023, equal to 0.375 yuan per share.

“In 2024, the external environment will be more complicated, tough and uncertain,” said Bocom Chairman Ren Deqi. “But overall, China’s economy will continue to improve and its long-term positive outlook remains unchanged.

“With increasing forces supporting the high-quality development of the economy, investment will continue to grow, consumption will steadily improve and foreign trade will be more resilient. Banks will see more development opportunities.”