Domestic-listed Shenzhen Development Bank (SDB) posted a strong
first-half result with net profits jumping 176 percent year on year
to 464 million yuan (US$58 million).
The healthy profits are mainly attributed to the marked drop in
the non-performing loan ratio in the half-year operational report
issued by the company on Friday.
Net profits for the first half of the year are nearly 50 percent
higher than for the whole of 2005, according to the revised
domestic accounting standards imposed by the Ministry of
The ratio of non-performing loans to total lending dropped to
8.3 percent from 10.7 percent in the same period of last year.
The bank recovered nearly 950 million yuan (US$119
million) problem loans during the period, with 197 million
yuan (US$22 million) of non-performing capital being written
The bank's total deposits grew 21 percent in the first half, and
loans were up 30 percent.
The bank's lending in the first half year conforms to the
government's macro-control policies, eschewing loans to sectors
under governmental control and emphasizing consumer credit and
loans to small- and medium-sized enterprises (SMEs).
The Capital Adequacy Ratio (CAR) and Core CAR were both 3.58
percent at the end of June, up from 3.14 percent and 3.15 percent a
However, the ratio is still less than half the regulatory
minimum of eight percent.
SDB is the only Chinese bank controlled by foreign shareholders.
Its proposal to float previously non-tradable shares on the market
failed to win shareholder approval last month.
The SDB said in the report that it will solicit shareholders'
opinions and make new reform proposals once the three-month period
following the rejection of the first proposal has elapsed.
The bank, which is controlled by the US private-equity firm New
bridge Capital, has signed an agreement with GE Consumer Finance
(GECF) which would allow GECF to acquire newly issued SDB shares
valued at US$100 million. The agreement is awaiting approval from
regulatory authorities and shareholders.
(Xinhua News Agency August 19, 2006)