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Huaxia bank expects 22% profit growth

(South China Morning Post)
Updated: 2007-03-28 10:16

Huaxia Bank, partly owned by Deutsche Bank, said profit growth might almost double this year as a booming economy bolstered demand for loans and other financial services.

Huaxia Bank, partly owned by Deutsche Bank, said profit growth might almost double this year as a booming economy bolstered demand for loans and other financial services. [CRIENGLISH.com]

Income before taxes might increase 22 per cent to 2.95 billion yuan, theBeijing-based lender said in a statement to theShanghai stock exchange. The estimate compares with 12 per cent growth last year.

Huaxia must raise money to meet a requirement for financial strength set by the central bank, to avoid having to slow new lending.

The lender said it aimed to sell 4.5 billion yuan of a special hybrid bond and 15 billion yuan of regular debt in the first half to replenish capital.

Outstanding loans were expected to jump 19 per cent this year to 310 billion yuan and deposits to rise16 per cent to 430 billion yuan, the bank said.

The ratio of non-performing loans was likely to remain at less than 2.7 per cent of credits, it said.

By Huaxia's estimates, the loan-deposit ratio would climb to 72 per cent, just shy of the maximum 75 per cent allowed by the government.

Premier Wen Jiabao is seeking to control bank lending to quell inflation and discourage wasteful investment in factories and property.