Banking News
- Shenzhen bank first-half net more than doubles
Date: 20-Aug-2007 Sources: (Shenzhen Daily)
MID-SIZED Chinese lender Shenzhen Development Bank Co. said last week its first-half net profit more than doubled from a year earlier, driven by healthy loan growth, an improved interest spread and effective tax management.
The bank, which is effectively controlled by U.S. private-equity firm Newbridge Capital, said its net profit for the first six months ended June 30 surged to 1.124 billion yuan (US$147.92 million) from 518 million yuan a year earlier.
Its net interest income, mostly derived from lending, rose to 4.43 billion yuan in the first half from 3.11 billion yuan a year earlier.
The bank's net profit increase came after a change in lending strategy.
'In the first half, the bank followed the government's macro-control policies and the central bank's requirements, avoiding lending to specified industries, and emphasizing loans to consumers and small- and medium-sized enterprises,'Shenzhen Development Bank said in a statement.
Mo Fan, an analyst at Soochow Asset Management, said: 'The bank's first-half results are in line with market expectations. We expect the bank's earnings per share to rise to 1.11 yuan this year from 0.67 yuan in 2006.
'Given it has completed the share reform, the bank can do more to supplement its working capital and expand business,'said Mo.
In June, shareholders approved Shenzhen Development Bank's long-delayed share-reform plan, clearing a major hurdle for General Electric Co. to finalize its purchase of a 7-percent stake in the bank. The deal is still pending approval by regulators.
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