Corporate loans help China Minsheng to a 45pc rise in net profit

PUBLISHED : Tuesday, 29 March, 2011, 12:00am
UPDATED : Tuesday, 29 March, 2011, 12:00am

China Minsheng Banking Corp booked a 45.25 per cent jump in net profit to 1.76 billion yuan (HK$2.09 billion) for last year from 2009, helped by robust growth in corporate loans.

The bank's operating income went up 30.04 per cent to 54.7 billion yuan while assets increased 27.86 per cent to 1.8 trillion yuan.

Loans to private companies, including small and medium-sized enterprises, comprised 45.1 per cent of the total corporate loans compared with 37.3 per cent in 2009.

The value of general corporate loans increased 11.2 per cent from 930.4 billion yuan to 1.2 trillion yuan.

Loans to small and micro enterprises represented 60.8 per cent of retail loans, which rose 75.3 per cent to 261.5 billion yuan. The loans, made through a loan product called Shang Dai Tong, represented only 30 per cent of retail loans in 2009.

Mao Xiaofeng, vice-president of the bank, said it extended loans to small and micro enterprises mainly from the service sector, including retail, high-end grain wine and electronic appliance companies.

Hong Qi, the bank's president, said Minsheng would seek to consolidate its role as the major bank loan provider to private enterprises and small and micro enterprises. He said he expected demand for loans would continue to be strong amid rapid urbanisation and the central government's ongoing push to boost domestic consumption.

Hong also predicted the net interest margin would continue to grow. It went up 0.35 percentage point to 2.94 per cent in 2010.

The net interest margin is a measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out, relative to interest-earning assets.