Industrial and Commercial Bank of China Limited ("ICBC" or the "Bank", SSE: 601398; SEHK: 1398) today announces its interim results for the six months ended 30 June 2010. Based on International Financial Reporting Standards, ICBC's profit after tax for the first half of 2010 was 85 billion yuan, up 27.3% from the same period of last year. Its earnings per share increased to 0.25 yuan.

Worth paying attention to is the fact that ICBC's strong profit growth in the first half of 2010 is achieved following a positive earnings growth in the same period last year, reflecting the stability and sustainability in the Bank's profit growth. According to industry experts, in the first half of 2009, due to the global financial crisis, many Chinese banks had experienced a decline in profit, and earnings of some of the listed banks even declined by 40% during the period. In such a challenging environment during the first half of last year, ICBC still achieved a profit growth of 2.8%, fully reflecting the ability of the Bank's business model and development strategy to counter economic fluctuations. Since the beginning of 2010, China has maintained its economic growth momentum. With a higher base for comparison, ICBC still achieved a profit growth of 27.3%, reflecting the strength and sustainability of its business development.

Meanwhile, ICBC's asset quality has withstood the test of economic fluctuations. In the first half of this year, both the non-performing loans balance and the NPL ratio declined for the 11th consecutive year. As at the end of June 2010, ICBC's NPL ratio decreased to 1.26%, down 0.28 percentage points from the end of 2009. The quality of its assets was one of the best among its peers. At the same time, the provision coverage ratio rose significantly to 189.81%, representing an increase of 25.4 percentage points from the end of 2009. The cash provision balance reached approximately 1.9 times of the non-performing loan balance, which not only substantially enhanced ICBC's capability to withstand risks but also provided a solid financial foundation for future business development.

Regarding the risks related to the loans to local government financing platform and real-estate industry, which have raised a lot of concerns, ICBC strictly adheres to the credit approval criteria when providing loans and took effective and timely measures to control potential risks. As a result, the quality of such credit assets has been well maintained. In the area of real-estate loans, ICBC has been giving support primarily to housing development projects and providing mortgages for owner-occupied residential properties. The proportion of mortgage loans for the first properties of home owners to the total mortgage loans for individuals reached 94%. At the end of June 2010, the NPL ratios of real-estate loans and individual mortgage loans have been remained low at 0.80% and 0.44%, respectively. In the area of local government financing platform loans, most of such loans provided by ICBC were for provincial and municipal financing platforms and high-quality urban infrastructure projects. The overall quality of these loans remained healthy, with a current NPL ratio of only 0.02%.

In the first half of this year, ICBC continued to implement the policy of prudent lending. The amount of RMB loans provided by ICBC's domestic branches increased by 524.1 billion yuan, representing a growth of 9.9%, lower than the industry average by 1.7 percentage points. Rational and balanced lending is in line with the government's macro tightening policies, and at the same time provides support to the economy. In terms of the offering and structure of lending, ICBC strictly limited loans for new projects and 95% of the loans were provided to projects under construction or ongoing projects. In terms of the industries, loans were mainly provided to key national infrastructure projects, key industries that are being revitalized and emerging industries of strategic importance, in order to provide proactive support to these sectors. At the same time, ICBC proactively expanded its small business loans and trade financing businesses. As at the end of June 2010, small business loans balance reached 390.9 billion yuan and the increase in such loans in the first half of 2010 exceeded that in the entire year of 2009, representing a growth rate of 25.8%, 15 percentage points higher than the bank's average growth rate of loan. The amount of trade financing loans increased by 24.9% and the proportion of the loan balance increased to 28% of total working capital loans.

The loan yield of ICBC has been gradually increasing, reversing the downward trend since last year, as ICBC adjusted and optimized its loan portfolio. The loan yield of ICBC in the first half of 2010 increased by 6 basis points from the first quarter, resulting in an increase of 11 basis points in net interest margin to 2.37%, which demonstrates a distinct improvement of the efficiency in asset allocation as well as the profitability of ICBC. This is one of the key reasons that can explain how ICBC achieved a net profit growth of 27.3% in the first half of 2010 with a loan growth of about 10%. Since its IPO in 2006 through to 2009, ICBC has kept an average loan growth rate of merely 16.4% annually, while its average profit growth rate per year reached 37.7%. In the first half of 2010, ICBC maintained the growth momentum, and found the way for capital-saving development.

The intermediary business of ICBC, another driver for the Bank's business development, also achieved robust growth, while its market competitive advantages were solidified and strengthened. In the first half of 2010, the net fee and commission income of ICBC reached 36.9 billion yuan, representing a year-on-year increase of 33%, and contributed 20.39% to ICBC's total revenue, up 2.57 percentage points from the end of 2009. The contribution from investment banking business further increased, with an income of 8.666 billion yuan in the first half of 2010, representing a year-on-year increase of 21.3%. The wealth management business increased by 43% from the same period of last year, and the income of corporate wealth management business increased by 87.1% on a year-on-year basis. For the intermediary businesses which ICBC has been enjoying competitive advantages, corporate customers settlement business grew strongly, with an increase of 378,000 new corporate settlement accounts in the first half of 2010. The volume of RMB settlements reached 784 trillion yuan, 502 trillion yuan higher than the same period of 2009, representing a growth of 177%. Total assets under custody of ICBC exceeded 2 trillion yuan, making ICBC one of the biggest banks in Asia in terms of asset custody, and the custodian fee income increased by 45% compared with the same period of 2009, the highest among Chinese banks. With its over 40 million credit card holders and total card spending of 270.1 billion yuan in the first half of 2010, ICBC continues to be the fourth largest credit card issuer in the world and the largest credit card issuer in China. ICBC's electronic banking business further demonstrated its role as a crucial trading channel for the Bank, accounting for 54.6% of the Bank's total business, an increase of 4.5 percentage points from the beginning of 2010. In addition, the emerging intermediary businesses, such as private banking business and precious metals business, were developing rapidly and incomes from these businesses in the first half of 2010 was already close to that for the full year of 2009, showing a promising future prospect.

While rapidly growing its domestic business, ICBC has achieved steady progress in the development of its overseas business. Over the past few years, ICBC has been striving to strengthen its overseas foothold, resulting in simultaneous growth and increased collaborations between its domestic and overseas businesses. In the first half of this year, ICBC further expanded its overseas network and businesses. ICBC's branches in Malaysia and Hanoi have started operations,while trial operation has commenced at its branch in Abu Dhabi. The Bank has also completed the acquisitions of BEA Canada and Thailand's ACL Bank. At the end of June 2010, ICBC has set up 181 branches and offices in 22 countries and regions and has established a global network and service chain that covers the five continents of Asia, Africa, Europe, America and Australia. A unified technological platform has helped ICBC to introduce its quality products and services to overseas markets, resulting in significant increase in the scale and efficiency of its overseas business. At the end of June 2010, the total assets of ICBC's overseas branches increased by 25.44% from the end of last year, while pre-tax profit of this segment increased by 46.61% year-on-year.