Bulletin
Investor Alert

London Markets Open in:

Aug. 29, 2010, 11:55 a.m. EDT

Shanghai Pudong Bank profit up 34%

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Citigroup Inc. (C)

or Cancel Already have a watchlist? Log In

By MarketWatch

(Adds bank's plan to issue CNY30 billion worth of bonds.)

SHANGHAI (MarketWatch) -- Medium-sized lender Shanghai Pudong Development Bank Co. (600000.SH) said Sunday its first-half net profit rose 34% from a year earlier due to rapid growth in its interest income and fee-based intermediary businesses.

The bank, in which Citigroup Inc. /zigman2/quotes/207741460/composite C +0.58% owns a 3.4% stake, also said it intends to sell CNY30 billion (US$4.4 billion) worth of bonds by the end of next year to replenish its capital base, which was weakened by aggressive expansion and a government-directed lending binge last year.

Shanghai Pudong Development Bank said its net profit for the six months ended June 30 was CNY9.08 billion, up from CNY6.78 billion a year earlier.

The earnings growth dwarfed that of bigger rivals such as Industrial & Commercial Bank of China Ltd., which said Thursday its first-half net profit rose 27% from a year earlier, because medium-sized banks can charge the small and medium-sized companies that make up their client base higher interest rates on loans than big banks charge their customers.

The Shanghai-based bank said its net interest income, which accounted for nearly 90% of its operating revenue, rose 34% to CNY20.33 billion from CNY15.13 billion a year earlier, while net fee and commission income from intermediary businesses such as credit cards and asset management surged 70% to CNY1.82 billion.

However, the bank's rapid expansion in recent years put pressure on its capital base. As of June 30, its capital-adequacy ratio was 10.24%, down slightly from 10.34% at the end of 2009 and marginally above the minimum 10% required for China's medium-sized banks with a national presence.

Besides the planned bond issue, Shanghai Pudong Development Bank also plans to raise CNY40 billion by selling a 20% stake to China Mobile Ltd. (CHL) to boost its capital base. The private placement of shares in the world's largest cellular-phone operator is still under review by China's banking, securities regulators as well as state-asset supervisors.

/zigman2/quotes/207741460/composite
US : U.S.: NYSE
$ 60.91
+0.35 +0.58%
Volume: 18.76M
Jan. 26, 2021 4:02p
P/E Ratio
12.11
Dividend Yield
3.35%
Market Cap
$126.09 billion
Rev. per Employee
N/A
loading...

This Story has 0 Comments
Be the first to comment
More News In
Investing

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.