China's Listed Banks Report Profit Growth

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Last updated at: (Beijing Time) Thursday, October 03, 2002

China's Listed Banks Report Profit Growth

All the four listed banks on China's mainland have reported sound business operations during the first half of this year.

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All the four listed banks on China's mainland have reported sound business operations during the first half of this year.

The Shenzhen Development Bank, Shanghai Pudong Development Bank,China Minsheng Banking Corporation, and China Merchants Commercial Bank have respectively registered a six-month profit of 890 million yuan (107.2 million US dollars), 1.568 billion yuan (189 million US dollars), 495 million yuan (59.6 million US dollars), and 2.165 billion yuan (261 million US dollars), according to statistics.

The average yield rate of net capital for the Shenzhen Development Bank, Shanghai Pudong Development Bank, and China Minsheng Banking Corporation was 7.46 percent during the January-June period this year, an increase of 30 percent over the same period last year

The China Merchants Commercial Bank, which was listed this year, also reported a net profit increase of 40 percent in comparison with the same period last year.

Bad debts have decreased. The China Merchants Commercial Bank reported a bad debt ratio of 8.06 percent at the end of the second quarter this year, 2.19 percent lower than at the beginning of the year.

The Shenzhen Development Bank has cut its bad debt ratio from 14.84 percent early this year to 13.39 percent at the end of June.

Analysts with Huaxia Securities believe the generally sound overall economy has fostered a climate conducive to the development of listed banks.

China's economy remains one of the fastest growing in the world with a 7.8 percent GDP growth rate during the first half of this year.

The aggregate money supply has continued to grow, the balance of payments has been satisfactory, financial operations have been stable, and credit has generally been set to the rate of economic growth. With the general economy growing steadily, industrial profts have increased.

The banks extended 12 percent more credit during the first half of this year and earned more interest.

The four listed banks all expanded their investment in bonds during the first six months of this year as the market for treasury bonds was active.

Statistics show the Shenzhan Development Bank's investment returns increased by nearly 70 percent, and the Shanghai Pudong Development Bank, by nearly 30 percent.

The analysts believe the listed banks will base their future business growth on individuals, private finance, and loans for small and medium-sized enterprises. However, they also note that the current financial system, which is concentrating on stability, will to some extent limit the exploration of other fields by these banks.

They estimate that these listed banks will maintain stable development during the second half of the year, but it will be difficult for them to maintain the high growth rate achieved during the first half of this year.

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