Banking News
- China Minsheng Bank reports 1st-half profit soared on loans
Date: 5-Jul-2007 Sources: (Xinhua Online)
China Minsheng Banking Corp said first-half profit surged more than 60 percent as it extended more loans and demand for services such as wealth management increased, Bloomberg said today.
The bank, in a statement to the Shanghai exchange, didn't provide a figure for first-half profit and said its growth estimate was based on unaudited numbers. Minsheng, the nation's first privately owned bank, posted a profit of 1.73 billion yuan (228 million U.S. dollars) in last year's first half.
China's banks, having raised 11 billion dollars in share sales this year, are doling out loans and expanding in wealth management and insurance in the world's fastest-growing major economy. Minsheng Bank, founded in 1996 by 59 investors including pig-feed tycoon Liu Yonghao, has averaged 40 percent profit growth since 2002.
Growth at Beijing-based Minsheng, the nation's seventh-largest bank by market value, accelerated from 43 percent last year. It raised 2.3 billion dollars in a private placement in March, and plans to sell 20 billion yuan of bonds to boost capital and finance a targeted 19 percent increase in lending in 2007.
China's economy may grow 10.8 percent this year, the fastest pace since 1995, the central bank forecasts. The government, concerning that bank loans are being illegally used to fund stock purchases, has asked banks to cap lending growth at 15 percent this year.
Minsheng's 1.2 percent bad-loan ratio compares with the 8.2 percent average among China's five largest state-owned banks. It has avoided bad loans with a centralized screening system and a focus on medium-sized companies and overseas ventures such as the local units of Coca-Cola Co and Chongqing Highway Development Co.
Minsheng has about 287 outlets nationwide, compared with 18,000 branches at Industrial & Commercial Bank of China Ltd, the nation's largest.
The company's market value has swelled sevenfold since 2002 to 165 billion yuan. China Life Insurance Co. and Ping An Insurance (Group) Co, the country's two biggest insurers, paid a combined 10.9 billion yuan for almost 10 percent of the lender this year.
Companies traded in China are required to make an announcement if they expect profit to rise or fall by 50 percent or more. Minsheng Bank is scheduled to release audited first-half results on Aug. 31.
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