Shenzhen Bank Sees Profit Boost

Shenzhen Development Bank Co said on Monday it expected its first-half net profit to almost double from a year ago on loan growth, an increase of interest spread and improved asset quality.

The Shenzhen-listed lender, partly held by United States-based TPG Inc, said net profit was likely to rise by 85 percent to 95 percent on year in the first six months of 2008, an exchange filing showed.

The growth will translate to a net income of 2.079 billion yuan (US$303 million) to 2.192 billion, compared with 1.124 billion yuan for the same period in 2007, the filing said.

The profit increase was driven by a rise in loans, expanded interest margins, growth in intermediary incomes, less non-performing debt and a lower tax rate.

"We are upbeat about the lender's growth as its capital strength and asset quality are being improved," Huatai Securities Co said on Monday.

The Shenzhen bank has been tightening oversight of individual property mortgages since the second half of 2007, and it is set to limit its non-performing ratio in the segment to below 1 percent by end of June, the filing said.

The lender also said it expected non-performing loans to drop by more than 500 million yuan in the second quarter this year and the overall non-performing ratio to fall by 0.5 percentage point in three months.

The bank rose 2.14 percent to 21.45 yuan on Monday.

Source: CRIEnglish