• Sat
  • Nov 1, 2014
  • Updated: 5:36pm

Citic Bank sees 80pc jump in first-half profit

PUBLISHED : Monday, 16 July, 2007, 12:00am
UPDATED : Monday, 16 July, 2007, 12:00am

China Citic Bank, the mainland's eighth-largest bank, said its first-half net profit jumped by more than 80 per cent on increased lendings and intermediary income, as well as a widening net interest margin.


The lender recorded a net profit of 1.71 trillion yuan for the first half of last year but did not give an estimate for this year's first half, according to its statement to the Hong Kong stock exchange yesterday.


'The development of the company's various businesses experienced positive trends in the first half of 2007,' Citic Bank said. 'The increase in net profit primarily comes from increases in loans and advances, a substantial increase in net interest margin, and a significant increase in intermediary business income.'


Earnings at mainland banks have been bolstered by rising demand for loans as companies seek to expand amid robust economic growth.


Returns on loans were further improved by several interest rate increases since last year by the central bank to crimp credit growth.


Some lenders also benefited from higher personal income in the mainland, enabling them to sell more wealth management products.


Last week, Industrial and Commercial Bank of China, the nation's largest bank said its first-half profit rose by at least 50 per cent, while seventh-largest China Merchants Bank said net income more than doubled.


Companies listed in the mainland are required to make an announcement if their earnings change by 50 per cent or more.


Shares in Citic Bank, which dual-listed in Hong Kong and Shanghai in April, have gained 56 per cent in Shanghai. In Hong Kong, the stock has gained 5.8 per cent since listing.


Mainland lenders are seeking to broaden their fee-based and other non-interest income as foreign banks are now able to incorporate locally and operate yuan-denominated lending businesses.


Citic Bank's Spanish shareholder Banco Bilbao Vizcaya Argentaria last month said that it was in talks with the bank to tap the mainland's nascent pension fund business.


BBVA would also help Citic Bank get a qualified domestic institutional investor permit to invest Chinese capital overseas, BBVA Asia's general manager Manuel Galatas said.


When Citic Bank marketed its US$5.4 billion share offering, it forecast profit growth of more than 53 per cent to 5.7 billion yuan this year from 25 per cent growth last year.


Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or