Huaxia Bank, a Beijing-based lender partly owned by Deutsche Bank, said first-half profit surged 16 per cent as it earned more interests on higher demand for loans amid the country's booming economy.
Net profit rose to 745 million yuan in the six months to June 30, up from 640 million yuan a year ago, Huaxia said in a preliminary earnings statement to the Shanghai Stock Exchange yesterday.
Revenue rose 28 per cent to 8.2 billion yuan from 6.4 billion yuan. The unaudited figures are based on Chinese accounting standards and the bank is scheduled to report its detailed first-half earnings on August 31.
China's economic growth accelerated to 10.9 per cent in the first half, fuelling consumer and corporate demand for loans. Mainland banks extended 2.18 trillion yuan of new loans in the first six months, almost 90 per cent of the central bank's full-year target of 2.5 trillion yuan.
'Chinese joint-stock banks no doubt benefit from the strong economic growth and strong credit demand, with their earnings growth rates outpacing those of the Big Four state-owned banks,' said Zhang Jing, a banking analyst at Shanghai Securities.
'Over 80 per cent of Chinese banks' revenue comes from lending.'
Strong demand for loans also supported earnings of Huaxia's larger rivals including Shanghai Pudong Development Bank and China Merchants Bank.
Pudong Bank, partly owned by Citigroup, said first-half profit rose 31 per cent to 1.59 billion yuan. Merchants Bank, which is planning to sell shares in Hong Kong early next month, also posted a 31 per cent rise in net profit to about 2.8 billion yuan.
State-owned lenders Bank of China and China Construction Bank, which were listed over the past year, are expected to announce their first half earnings at the end of this month.
Shares of Huaxia Bank climbed 2.6 per cent to close at 3.96 yuan after the release of the preliminary half-year earnings report.
Deutsche Bank, Germany's largest lender and Cologne-based Sal Oppenheim Jr & Cie own a combined 13.9 per cent stake in Huaxia Bank, China's eleventh-biggest lender.
Deutsche Bank chief executive Josef Ackermann in June said that his bank was prepared to raise its stake in Huaxia to the maximum limit of 20 per cent permitted for a single foreign investor in a mainland lender.