ICBC's NIM flat at 2.7% as time deposits grew significantly in 3Q12

Time deposit grew 11.8%.

According to Barclays, ICBC’s NIM was largely flat q/q, at 2.7% in 3Q12, which was weaker than its big bank peers (+10bps in CCB, +6bps in ABC and +8bps in BOC).

Here's more from Barclays:

We believe the slightly weaker quarterly NIM performance could be attributable to its significant time deposit growth (+11.8% q/q) as well as a pause after ICBC’s non-stop NIM expansion in the last few quarters since 3Q09.

Total deposit grew 3.4% q/q to Rmb13.6trn as of end-3Q12. Time deposits increased significantly by 11.8% q/q, compared with 0.7% q/q growth on demand deposits.

Time deposits accounted for 50.6% of total deposits as of end-3Q12, up from 46.9% at end-1H12, implying the accelerating time deposits migration, which is in line with system trend. Total loans rose 2.5% q/q in 3Q12. Loan-to-deposit ratio reduced to 63.4% at end-Sep from 63.9% at end-June.

Steady fee income
Net fee income was steady, up by 2% y/y or down by 5% q/q to Rmb24.9bn in 3Q12. While fee income will continue to be negatively affected by regulatory tightening rules, its declining trend has largely stabilized.

Stable asset quality, both NPL amount and NPL ratio dropped q/q
The bank’s NPL balance slightly decreased by 0.5% q/q in 3Q12, and NPL ratio declined by 2bps q/q to 0.87% as of end-Sep. Therefore the credit cost was low, at 27bps in 3Q12 (vs. 43bps in 2Q12, and 51bps in 1Q12).

Improving capital level
Tier 1 ratio improved by 13bps q/q to 10.51%, and total CAR also increased by 5bps to 13.61% as of end-Sep, both above regulatory requirements, implying a good capital position.