Pudong Development Bank, in which the world's biggest financial
services company Citigroup is a stakeholder, said yesterday its net
profit jumped 64 percent to 5.5 billion yuan last year, aided by
strong loans growth.
The bank, expected to play a key role in Shanghai's effort to
form a financial holding group, is the first listed lender to
report strong growth in 2007.
Analysts said listed banks in China are expected to post gains
of more than 50 percent for the past year, on strong loans growth,
increasing fee-based income boosted by a soaring stock market, and
cost-cutting and streamlining efforts.
They expected the momentum to continue this year, predicting
profit growth of at least 30 percent in the sector.
In an unaudited preliminary report on last year's earnings, the
Shanghai-based bank said revenue from core operations gained 35
percent to 40.3 billion yuan. In the period, the medium-sized
commercial bank's total profit surged 72 percent to 10.4 billion
yuan.
At the end of the reference period, earnings per share were at
1.26 yuan, a jump of nearly 64 percent year-on-year. The rate of
return on common stockholders' equity was about 20 percent, up 6
percentage points over 2006.
Figures for 2006 were revised slightly because of accounting
rule changes. Pudong Development Bank will make a detailed 2007
earnings statement later.
The Shanghai-listed bank's shares tumbled 2.68 yuan, or 5
percent, to 50.87 yuan yesterday.
The bank's strong performance is expected to mirror overall
growth in the sector, analysts said.
"Listed banks will post steady and healthy growth for the past
year of more than 50 percent," said Wang Qian, an analyst at
Shanghai-based Industrial Securities Co.
She said the performance of State-owned banks, including Bank of
China, the Industrial and Commercial Bank of China and China
Construction Bank, will exceed expectations with even stronger
growth anticipated for the fourth quarter, compared with the first
nine months last year.
Strong loans and fee-based income is behind the growth, as stock
investors flock to banks for funds. Banks have also improved
administration and risk management and adjusted their
strategies.
(China Daily January 4, 2008)
