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 (ICBC) has surged ahead of its international competitors thanks to a booming domestic economy that has dramatically boosted profits. ICBC’s half yearly earnings jumped an astonishing 57% to US$9.4-billion, up from US$5.9-billion last year. Lending, investment banking and wealth management all saw significant increases as the Chinese economy continued to outpace much of the rest of the world.
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.
The rise of ICBC is matched by China's other leading banks. (Among them China Citic Bank Corp, China Merchants Bank, and China Construction Bank)
The fortunes of the Chinese banking industry, which has been relatively insulated from the global credit crunch, contrasts sharply with slashed profits at banks on Wall Street and [Canada’s] Bay Street and across Europe.
"China may still grow significantly faster than developed economies for at least another one or two decades," said JP Morgan's Hong Kong-based bank analyst Samuel Chen in a recent report.
[Excerpt of an article by Duncan Mavin, The Financial Post]
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