Skip to content
Subscriber Only
Business

ICBC Breach of Bad-Loan Buffer Shows China Banking Stresses

  • Cutting provision coverage ratio lets ICBC avoid profit fall
  • Lenders may be betting regulator will ease provision rules
Video player cover image

ICBC Breaches Bad-Loan Provision Rule

Bloomberg News
Updated on

Industrial & Commercial Bank of China Ltd.’s breach of a regulatory requirement for bad-loan provision coverage added to signs of growing stress in the nation’s banking industry.

ICBC avoided reporting a quarterly drop in profit on Thursday by letting provisions fall to 141 percent of existing nonperforming credit, below the 150 percent level required by the China Banking Regulatory Commission. The move let it eke out a 0.6 percent gain in net income for the first three months from a year earlier.