Banking News
- China Merchants Bank profit up over 50%
Date: 22-Jan-2007 Sources: (Shenzhen Daily)
CHINA Merchants Bank Co., the country's sixth-largest lender, said Friday its 2006 profit surged more than 50 percent as it took market share from the four biggest State-owned banks.
China's publicly traded companies are required to issue a notice before reporting official earnings when they expect net income to gain by more than 50 percent.
The Shenzhen-based bank, the first to offer Internet banking and dual-currency credit cards in China, is tapping demand for loans in an economy that grew 10.5 percent in 2006. Shares of China Merchants have doubled since it raised US$2.4 billion in a Hong Kong stock sale in September.
'China Merchants is one of the more professionally run and the one we feel most comfortable with,'' said Hugh Young, who helps manage US$25 billion at Aberdeen Asset Management Ltd. in Singapore and holds the stock. 'We're hoping they have better flexibility and business sense than some of the state banks.''
The company, which had net income of 3.93 billion yuan (US$506 million) in 2005, in October targeted 47 percent profit growth for 2006. It has boosted profit by an average 49 percent annually since 2000. The statement didn't disclose the size of last year's profit.
The company is taking market share from the four biggest State-owned banks by offering higher-margin products such as dual-currency credit cards. China Merchants has boosted earnings faster than Industrial & Commercial Bank of China, Bank of China Ltd., China Construction Bank Corp. and Agricultural Bank of China, which are all controlled by the government.
China Merchants has the strongest exposure to the rapidly growing lending market, according to a report by Merrill Lynch & Co. published Jan. 12.
The bank in October reported third-quarter profit rose 53 percent to 1.67 billion yuan.
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