Stocks News
- Industrial Bank profit surges 51%
Date: 7-Feb-2007 Sources: (Shenzhen Daily)
INDUSTRIAL Bank Co.'s profit growth accelerated to 51 percent last year as China's economic expansion boosted loans and services demand, the lender said after its shares surged 39 percent on their debut Monday.
Net income climbed to 3.72 billion yuan (US$479 million) or 0.93 yuan a share last year, the Fuzhou-based company said in a preliminary earnings statement to the Shanghai Stock Exchange yesterday. Operating profit, including net interest and fee income as well as charges against bad debt, climbed 42 percent to 5 billion yuan, said the bank, partly owned by HSBC Holdings Plc.
Industrial Bank, with an average profit growth of 31 percent from 2003 to 2005, joined Shenzhen Development Bank Co. and other publicly traded peers in reporting record earnings after China's economy in 2006 grew the fastest in 11 years. Lenders' interest margins were also boosted by the central bank raising lending rates twice.
The lender, established in 1988, raised US$2 billion in an initial share sale that attracted record bids from investors this month. The stock soared 39 percent from the offer price of 15.98 yuan in its Shanghai debut Monday, valuing it as the nation's sixth-largest listed lender with market capitalization of US$14.3 billion.
The nation's banks are raising funds to comply with a government requirement to bolster their finances and to help fend off overseas competitors, which in December were allowed to begin taking yuan deposits. Six banks have sold a combined US$49 billion of IPO shares since June 2005.
HSBC's Hang Seng Bank owns 12.78 percent of Industrial Bank. International Finance Corp., the World Bank's private investment arm, has a 3.2 percent stake and a unit of Government of Singapore Investment Corp. holds 4 percent.
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