BEIJING (TheStreet) -- A good sense of where the Chinese economy is growing -- and where Chinese company stock investors should put their money -- emerged this week with the latest financial report filed by the world's biggest bank.
State-controlled Industrial and Commercial Bank of China (IDCBF) posted a 7.2% gain in net profits for the first half, year-on-year, to about $24 billion, according to the report released in Hong Kong, where ICBC stock is traded.
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That in itself wasn't big news, since China's state banks often report decent earnings. Wealth-building is easy for ICBC, thanks to generous government support and total assets of about $3.3 trillion, including $2.3 trillion in corporate and personal deposits. Earnings from loan interest alone jumped 12% over the same period in 2013 to more than $48 billion.More significant were notes in the report about ICBC's stepped-up business lending in the service sector and accelerated support for Chinese companies that do business abroad. Also noted was the bank's decision to spend $1.7 billion on stakes in banks in Taiwan, Turkey and South Africa. Growth in China's service sector -- which now accounts for about half of the nation's gross domestic product -- has been particularly focused on financing, insurance and Internet-related companies in recent months. Banks including ICBC and state-owned colleagues China Construction Bank (CICHF) and Agricultural Bank of China (ACGBY) have been recommended by Chinese analysts in recent weeks for profiting from rising fee income and an easing of liquidity restrictions by Beijing regulators. China's ongoing shift to a consumer-led economy and away from exports has also been a boon to insurance companies accessible to U.S. investors, including CNinsure (CISG) , China Life (LFC) and Ping An (PIAIF) . Read More: Goldman Sachs' 50 Stocks That Matter Most to Hedge Funds Banks and insurers have over the past year built new customer service and marketing channels on the Internet, following the lead of online retailers and platforms that list in the U.S., such as Dangdang (DANG) , JD.com (JD) and Alibaba. CNinsure, for example, operates a Web sales platform for travel, property and other types of insurance used by 20 other insurers including Ping An. ICBC said 82% of all transactions are now handled electronically. Its online clientele grew to 180 million Internet and 135 million mobile Internet banking customers in the first half. Yet the report also said a stronger push into Internet financing and related services was an "urgent requirement" for the bank. The bank also has ideas about the future of China's business development.