Banking News
- Huaxia Bank profit may gain 22%
Date: 29-Mar-2007 Sources: (Shenzhen Daily)
HUAXIA Bank Co., partly owned by Deutsche Bank AG, said yesterday profit growth may almost double this year as a booming economy bolsters demand for loans and other financial services.
Income before taxes may increase 22 percent to 2.95 billion yuan (US$381 million), the Beijing-based lender said in a statement. The estimate compares with 12 percent growth last year.
Huaxia must raise money to meet a requirement for financial strength set by the central bank and avoid having to slow new lending. The bank aims to sell 4.5 billion yuan of a special hybrid bond and 15 billion yuan of regular debt in the first half to replenish capital, it said.
Outstanding loans may jump 19 percent this year to 310 billion yuan and deposits will rise 16 percent to 430 billion yuan, the bank said. The ratio of nonperforming loans will remain at less than 2.7 percent of total credits, it said.
By Huaxia's estimates, the loan-to-deposit ratio would climb to 72 percent this year, just shy of the maximum 75 percent allowed by the government. Premier Wen Jiabao is seeking to control bank lending to quell inflation and discourage wasteful investment in factories and real estate.
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