The world’s biggest bank is Chinese

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The Beijing Olympic games are supposed to be China’s coming out cotillion. As the west struggles with deleveraging and recession, China wants to make a statement that it has arrived. The games have gone off remarkably well and most reports from the games have been positive.

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But, China is coming out in other places too. While it remains to be seen whether China will be able to successfully decouple from the West’s malaise, it is interesting to note that the world’s biggest — and most profitable — bank is Chinese.

China has arrived indeed.

As of today, there should be no remaining doubts as to the tectonic shift in the global economy — the world’s largest and most profitable bank is Chinese.

While banks in North America and Europe are still counting massive credit crunch losses, Industrial and Commercial Bank of China has surged ahead of its international competitors thanks to a booming domestic economy that has dramatically boosted profits.

In a statement from Beijing last night, ICBC said its half yearly earnings jumped an astonishing 57% to US$9.4-billion, up from US$5.9-billion last year.

The results catapult ICBC ahead of international global powerhouse HSBC PLC — the most profitable bank in the world last year — where earnings fell 29% in the first six months of 2008 to US$7.7-billion. Even before Thursday’s earnings announcement, ICBC was already the world’s biggest bank with a market capitalization of about US$235-billion.

Beijing-based ICBC , which has 380,000 staff, is benefiting from huge demand for loans and other banking services from its 2.7-million commercial clients and 170-million retail customers. Lending, investment banking and wealth management all saw significant increases as the Chinese economy continued to outpace much of the rest of the world.

National Post, 21 Aug 2008

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