Foreign banks continued to see robust growth in the first quarter of the year in Shanghai, the financial hub of the country.

Their profits in the city witnessed stunning growth of 46.8 percent year-on-year in the first three months, according to local regulators.

The 1.07 billion yuan (US$129.2 million) in profits of foreign banks accounts for more than 10 percent of all profits, at 9.5 billion yuan (US$1.14 billion), generated by commercial banks in Shanghai in the first quarter.

The total assets of foreign banks in Shanghai reached 342.34 billion yuan (US$41.34 billion), up 38.4 percent year-on-year, according to statistics from the Shanghai Bureau of the China Banking Regulatory Commission, compared to 1,187.8 billion yuan (US$143.45 billion) from State-owned banks, which grew by 10.1 percent year-on-year.

The bureau said that the total assets of shareholding banks stood at 785.91 billion yuan (US$94.91 billion), up 12.2 percent year-on-year.

In the highly competitive market, foreign banks' market share increased by 2.2 percent, a figure indicating that foreign banks are accelerating their business expansion following a gradual framework development over the past few years.

But Chinese banks are speeding up their disposal of bad assets to improve their performance, as indicated by bureau figures that showed non-performing assets (NPL) at State-owned banks in Shanghai dropped 490 million yuan (US$59.17 million), or 0.18 percent, to 47.59 billion yuan (US$5.74 billion) by the of March.

The NPL ratio of Chinese commercial banks dropped to 3.97 percent.

(China Daily April 21, 2005)