Banking News
- Shenzhen bank's profit may double
Date: 16-Oct-2007 Sources: (Xinhua Online)
SHENZHEN Development Bank Co. said yesterday it expects its nine-month net profit to rise 100 to 120 percent from the same period last year, boosted in part by rising loans and deposits in China's fast-growing economy.
Last year, the bank, partly held by U.S. private equity firm Newbridge Capital, reported a nine-month profit of 890.3 million yuan (US$118.6 million), or 0.46 yuan per share.
The increase would put its nine-month net earnings for this year, based on new accounting standards, at 1.78 billion to 1.96 billion yuan, it said.
The bank attributed the rise in earnings to an increase in loans and deposits, higher interest income and fee income, improved quality of assets and a lower effective tax rate.
Domestic security regulations require listed companies to issue earnings forecasts if they expect their profit to rise by more than 50 percent.
'The key issue is to keep control of new loan quality,'UBS AG analyst Victor Wang wrote in a report yesterday. He said the bank record in this area is strong, with less than 1 percent of lending made after Jan. 1, 2005, going bad. He expects net income of 2.56 billion yuan this year.
The bank's shareholders in June complied with a government directive by approving a plan to make all its stock tradable, removing restrictions on raising funds. The company said earlier it will raise 16 billion yuan by selling bonds for the first time and the move will boost its capital adequacy ratio to above 8 percent.
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