Pudong Bank profit soars 64%
Updated: 2008-01-04 09:06
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 ($756.53 million) last year, aided by strong loans growth.
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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.
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