Industrial and Commercial Bank of China (ICBC) warned on Thursday that banks could face a "complicated economic landscape" for the rest of 2019, even as its profit rose 4.5 per cent in the first half despite navigating a "changing economic and financial environment".
The bank, China's largest by assets, reported a profit of 167.9 billion yuan (US$23.5 billion) in the first six months of the year, compared with 160.4 billion yuan in the same period a year ago.
Beijing-based ICBC's profit was ahead of a consensus estimate of analysts surveyed by Bloomberg.
"On the one hand, the world economic environment is expected to tighten on the whole. There are more sources of global unrest and risk points, and considerable uncertainties in economic operations," the bank said in a filing to the Hong Kong stock exchange. "On the other hand, the Chinese economy will continue to operate robustly. A host of macro control policies such as streamlining administration and delegating power, cutting taxes and fees, and targeted easing start to take effect, creating a business environment in favour of the banking sector's sound and efficient operation."
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The bank's shares closed unchanged on Thursday at HK$4.89 in Hong Kong and finished the day up 0.37 per cent at 5.42 yuan in Shanghai.
ICBC's results came as a trade war has raged between the world's two biggest economies for the past year and weighed on the results of many lenders " inside and outside China. The tensions have hurt market sentiment and sent some investors to safety on the sidelines. The tit-for-tat showdown " US and China have placed tariffs on each other's imports " also has raised fears that a global recession could happen as soon as next year.
On Wednesday, State Street said that its monthly index of activity by institutional investors slipped to its lowest level in four months in August.
China's economic growth also has slowed this year, amplified by a decline in global trade and a shift in supply chains as tariffs have come online.
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Industrial production " a measure of the output of the industrial sectors in China " only grew by 4.8 per cent in July, down from 6.3 per cent in June and well below economists' expectations. It was the slowest growth rate since February 2002.
Fitch Ratings said last week that a severe economic slowdown in China triggered by the trade war could put credit pressure on banks in Asia's developed markets, with the most direct exposure among Hong Kong lenders.