ICBC, the country's biggest lender in terms of market value, posted a 46 percent gain in net profits to 92.73 billion yuan for the first three quarters of the year.

And its third quarter net profits alone jumped by 25.5 percent.

However, the lender revealed that it possessed $152 million worth of bonds associated with Lehman Brothers, and it made a $1.31 billion provision for the losses regarding corporate collateralized debt obligations (corporate CDOs).

According to a statement made to Hong Kong Exchanges and Clearing, ICBC registered a 23 percent increase in net interest income to 196 billion yuan during the period. Net fees and commission income rose 27.89 percent, year-on-year, to 34.58 billion yuan. Cost-to-income of the lender was 27.88 percent.

The amount of total loans and advances to customers was 4.42 trillion yuan. The loan-to-deposit ratio was 56.68 percent.

Total liabilities increased 8.09 percent to 8.8 trillion yuan. The amount due to customers amounted to 7.9 trillion yuan.

The statement said that the lender owned US subprime residential mortgage-backed securities, Alt-A residential mortgage-backed securities and structured investment vehicles (SIVs) with a nominal value of $1.86 billion.

It also noted that the lender held corporate CDOs with a nominal value of $505 million, equivalent to 0.04 percent of the lender's total assets.

The lender has made a $1.31 billion provision for the impairment losses on the assets. Provision coverage and the provision ratio stood at 103.63 percent and 52.06 percent.

The balance of non-performing loans was 104 billion yuan, a decrease of 6.89 billion yuan compared with the corresponding period in 2007.

The nominal value of bonds related to Freddie Mac and Fannie Mae held by ICBC was $1.67 billion. The lender made a $76 million write-off for the losses on the bonds. Provision coverage and the provision ratio were 100 percent and 4.35 percent.

Meanwhile, China Construction Bank (CCB) announced that the bank recorded a 47.71 percent increase in net profits to 84.23 billion yuan through September. Net interest income reached 168 billion yuan, a 20.73 increase, year-on-year.

The bank held $244 million in US subprime-mortgage-loan-backed securities and made a $673 million provision for the losses.

CCB's net profits jumped 12.11 percent during the third quarter.

(HK Edition 10/25/2008 page2)