HONG KONG: Bank of Communications (BoCom), the mainland's fifth-largest
lender, yesterday posted blistering growth for net profit in 2005 thanks to its
recent listing and strong lending.
The bank, which is 19.9 per cent owned by global lender HSBC Holdings Plc,
reported a net profit of 9.2 billion yuan (US$1.15 billion), increased by 477
per cent year-on-year from 1.6 billion (US$200 million) in 2004.
The Shanghai-based lender went public with a US$2.16 billion Hong Kong
initial public offering, one of the biggest IPOs in the city last year.
The bank attributed its better-than-expected results to the Hong Kong listing
last year, which it said helped enhance its efficiency.
"It is indeed a huge jump compared with last year. However, investors,
understandably, will not expect BoCom to generate as much profit this year," Yu
Yali, the bank's chief financial officer, said at a press conference yesterday.
BoCom Chairman Jiang Chaoliang said the Hong Kong listing in June last year
was one of the biggest drivers for profit growth.
"Ever since the listing last year, our group's image has been greatly
improved and the transparency of the management also strengthened As a result,
we received more customers bringing with us more rewarding businesses," said
Jiang.
Robust lending growth was indeed the driver for the net profit growth. The
bank's net interest income, derived from loans, rose to 31.6 billion yuan
(US$3.95 billion) last year from 25.2 billion (US$3.15 billion) in 2004.
The lender has shifted its lending business from large, State-owned companies
to private small- and medium-sized firms willing to pay higher interest rates.
BoCom said its primary sources of net profit are from East and North China,
generating a net profit of 7.9 billion yuan (US$987 million), which accounted
for 86 per cent of the lender's net profit.
BoCom also said that HSBC Holdings Plc would be its partner in developing
mainland securities and insurance businesses.
The first mainland bank that was listed in Hong Kong, BoCom said it will also
seek to list domestically, although it has not set a timeline.
"We want our home investors also have the opportunity of reaping our success,
but we currently do not have a timetable, neither have we decided how many
shares we are going to offer to mainland investors," said Jiang.
Founded in 1908, BoCom is the successor of a century-old nationally financial
brand in China. Having restructured in 1987, the bank emerged as the first
national joint-stock commercial bank in the Chinese mainland.
The lender's branch network covers China's economically developed regions. It
now has 137 branches, in addition to over 2,600 business outlets in the
mainland.
(China Daily 03/29/2006 page10)