ICBC (Asia) yesterday said its net income had risen 27 percent from a year earlier, as revenues from trading and interest income offset losses from investments. Wing Hang Bank, however, saw a slight decline during the period due to losses on impaired loans.

Wing Hang Bank posted a 1.9 percent decline in first-half net profits, to HK$938 million.

China's top lender ICBC's Hong Kong operation said its net profits for the six months ending June 30 totaled HK$915.96 million, up from HK$718.92 million a year earlier.

Interest rate income increased from HK$992 million for the same period last year to HK$1.52 billion, representing an increase of 54 percent, the bank said yesterday. Earnings from fee and commission increased 10 percent, or HK$30 million, to HK$355 million.

Chen Aiping, chief executive officer of ICBC (Asia), said the growth was supported by growing loans on trade finance and improved credit management.

"For the first-half, trade finance lending accounted for one-fourth of the new loan growth," Chen said.

Its wholly-owned subsidiary, Chinese Mercantile Bank, posted an increase of 165 percent in first-half net profits, which translated into 10 percent contribution to the group's total earnings.

In Hong Kong, ICBC (Asia) increased its number of branches to 42 in the first six months of the year. It opened a new branch in Aberdeen (Island South) in May and expanded the size of its outlet in Jordan (Kowloon).

Wing Hang's interest income jumped 12.5 percent to HK$1.31 billion on higher loan volumes and an increase of 2 basis points in net interest margins from 1.92 percent to 1.94 percent. Non-interest income also rose 15.9 percent, to HK$563 million. The bank will pay an interim dividend of HK$0.96 per share to its shareholders.

The gains in its core business were partially offset as Wing Hang booked a HK$45 million impairment loss on loans. The bank also suffered losses which were attributed to its investment in Hong Kong Life insurance. It booked a net loss of HK$73.9 million in associated companies, compared with a HK$29.6 million gain a year earlier.

Wing Hang made a further provision of HK$247 million for its collateral debt obligations (CDOs), and it was partially offset by the gains related to its perpetual subordinated debt.

Chairman and chief executive Patrick Fung said some mainland-based banks have shown interest in acquiring Wing Hang, but no negotiation is underway.

Looking forward, the bank plans to expand its business on the mainland, especially in the Pearl River Delta region. "Our capital on the mainland reached 1 billion yuan and we expect to invest 500 million yuan more in the region. But we are still waiting for the approval from the central government," Fung said.

(HK Edition 08/15/2008 page3)