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
ICBC Breaches Bad-Loan Provision Rule
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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.