ICBC's net profit climbed 10.2% to RMB262.6b

On back of higher non-interest income growth.

According to CCB International, Industrial and Commercial Bank of China (ICBC) reported FY13 net profit of RMB262.6b, up 10.2% YoY. Profit growth was driven by strong non-interest income growth of 21.2% YoY.Annualized ROE and ROA were 21.9% and 1.44%. The defensive nature of the bank should appeal to investors given rising uncertainty within China’s banking industry.

Here's more:

Delivers blunt assessment NIM and NPL situation. NIM was down 9bp as loan yields declined due to re-pricing after rate cuts in 2012. The NPL ratio climbed more than peers (up 9bp YoY), though it may have been distorted by write-offs and NPL-packed sales. ICBC, seeking a better recovery rate, seems more willing to resolve NPLs by itself than selling to AMCs.

Future earnings driver: restructuring. ICBC has weathered recent banking industry changes quite well and has taken strides to restructure its business, including: (1) shifting more resources to MSE (RMB1.87t, 20.4% of domestic loans) and personal loans (up 19.3% YoY vs. 11.7% YoY of domestic loans); (2) boosting fee income to achieve stable revenue; and (3) imposing stringent cost controls on funding and operating costs.