Banking News
- Merchants Bank cuts loan growth target
Date: 15-Aug-2007 Sources: (Shenzhen Daily)
CHINA Merchants Bank, the country's No. 6 lender, said it cut its full-year forecast for loan growth to 15 percent from an earlier 20 percent as the government imposes austerity measures aimed at cooling the economy.
The government has tried to put the brakes on lending to prevent sectors such property from overheating. It raised bank reserve requirement ratios and has made several interest rate hikes this year.
'We will definitely not be able to achieve 20 percent loan growth this year,'Qin Xiao, chairman of the bank, told reporters following a media conference.
The lender, which last week posted a 120 percent surge in first-half earnings, said it expected double-digit percentage net profit growth in the second half but said it would be difficult to match the soaring rate of growth seen in the first six months of the year.
The Shenzhen-based bank had total loans of 630 billion yuan (US$83.1 billion) at the end of June, up 11.3 percent from the end of 2006.
Ma Weihua, president of the bank, said loan growth would ease for the remainder of the year as the government urges banks to strengthen their risk controls and limit the credit to certain sectors. At the same time, Merchants Bank will control the quality of its lending, especially for property, he said.
China Merchants Bank also said it did not hold any assets that exposed it to the U.S. subprime lending crisis.
'The bank bought (U.S.) subprime mortgage-related investment in 2004 and sold them in 2006, which generated 13.4 percent returns,'Ma added.
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