Banking News
- Guangdong News
Date: 23-Mar-2007 Sources: (Shenzhen Daily)
SHENZHEN Development Bank Co., controlled by U.S. buyout firm Newbridge Capital, said Thursday 2006 profit more than quadrupled as it increased loan margins and cut provisions for bad debt.
Net income climbed to 1.3 billion yuan (US$168.1 million), or 0.67 yuan a share, from 311 million yuan, or 0.16 yuan a share, the bank said in a statement. Net operating income jumped 31 percent to 7.14 billion yuan.
'Profit this year will be driven by increased net interest margins and lower bad-loan provisions as the government hikes interest rates and the bank beefs up its recovery efforts,'' said Samuel Chen, a Hong Kong-based analyst at JPMorgan Chase & Co.
Shenzhen Development's credit provisions fell 21 percent last year from a year earlier, the statement said. Its bad-loan ratio fell to 8 percent last year, from 9.3 percent in 2005.
Shenzhen Development's deposits rose 15 percent in 2006 from a year earlier, while lending increased 17 percent. The bank's capital adequacy ratio, a measure of financial strength, remained at 3.7 percent compared to a year earlier, falling short of the mandated 8 percent.
Shareholders of Shenzhen Development in July rejected a plan to make all of its stock tradable, limiting the company's ability to raise funds. It is the last of the nation's publicly traded lenders to join a nationwide program to convert more than US$200 billion of mostly State-held equity into tradable shares.
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