BoC, ICBC post slow H1 profit growth
BoC warns of LGFV risks
Both lenders post narrower NIMs

BEIJINGHONG KONG, Aug 30 Reuters Two of China39;s biggest banks on Wednesday posted sluggish profit growth as the economy struggles to bounce back after the lifting of pandemic restrictions, with one saying local government financing vehicles LGFV had defaulted, hitting asset quality.

Industrial and Commercial Bank of China Ltd ICBC, the country39;s biggest lender, and Bank of China BoC posted in exchange filings first half profit growth of 1.2 and 0.78, respectively, from a year earlier.

Chinese lenders are battling headwinds such as lower lending rates and pressure from the government to prop up the economy which has been buffeted by weak demand both at home and abroad as well as bad debts related to property developers and LGFVs.

Some regional financing platforms that are weak in fiscal backing, have experienced a series of risk events, including defaults, said Liu Jiandong, BOC39;s chief risk officer in a postresults press conference.

There are some regional risks that have begun to emerge, Liu said, adding that asset quality has declined slightly but remains under control.

Both lenders posted a shrinking net interest margin NIM a key gauge of profitability for the first half of this year, a sign that lenders are under pressure to expand credit support to the struggling economy.

ICBC39;s NIM stood at 1.72 at the end of June, down from 1.77 at the end of March….