Citi issued a research report stating that it expects the market to react positively to ICBC's (01398) robust first-quarter performance. Furthermore, in light of the upcoming second round of capital replenishment for major banks, Citi anticipates that ICBC will receive a capital injection of slightly less than RMB 100 billion. This is estimated to dilute earnings per share by 3% to 4%, but the bank's current valuation remains attractive. Citi has set a target price of HK$7.95 and reiterated a "Buy" rating. The report indicated that ICBC's pre-provision operating profit (PPOP) for the first quarter grew by 9.2% year-on-year. This growth was driven by a recovery in net interest margin, strong trading gains, steady fee income, and an improved cost-to-income ratio. Net profit before preferred stock dividends increased by 3.3% year-on-year to RMB 86.9 billion, accounting for 23% of full-year market forecasts, though this was impacted by higher credit costs. Return on assets (ROA) and return on equity (ROE) fell by 3 basis points and 24 basis points year-on-year to 0.64% and 8.9%, respectively.
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