China Minsheng Banking Corp, one of the nation's leading joint-stock banks, reported a 33 per cent hike of its 2005 net profits, which reached 2.7 billion yuan (US$333 million) at the end of last year.
The bank's assets totalled 557.1 billion yuan (US$68.7 billion), with the non-performing loan ratio dropping to 1.28 per cent.
"Minsheng's business performance is satisfactory and growing more rapidly than domestic rivals, which were weighed down by higher bad loan ratios and government lending curbs," said an analyst with China Securities. "As the economy is still growing, the bank's capital shortage will be quenched."
The lender plans to sell as much as 4.3 billion yuan (US$530 million) in hybrid bonds to shore up capital and sustain a growth rate that's averaged 49 per cent in the past three years.
In its blueprint for 2006, Minsheng bank expects its full-year profit to grow 23 per cent to 3.33 billion yuan (US$407 million).
The outstanding amount of loans may expand by a quarter to 475 billion yuan (US$58.6 billion), while deposits are forecast to increase by 18.6 per cent to 580 billion yuan (US$71.7 billion).
The non-performing loan ratio will be kept below 2 per cent, the annual report said. ,
As the competition with overseas rivals intensifies, Minsheng Bank is in need of capital to increase its market share.
China will give HSBC Holdings Plc, Citigroup Inc and other foreign banks access to its US$1.83 trillion in household savings by the end of this year.
With 240 outlets nationwide, Minsheng Bank in June postponed its plan to raise US$750 million in its initial public offering in Hong Kong, citing poor market conditions.
Source: China Daily