114% YOY Net Profit Surge in 1H 2008

The company announced that it had achieved a net profit of RMB 6.05 bln for 1H 2008, up RMB 3.22 bln YOY or 114.29%, while its non-performing loan ratio decreased by 0.01% since the end 2007 to 1.21%. Total assets broke through the trillion mark to RMB 1.06 tln, increasing by RMB 142.41 bln, or 15.48%, over the figure at end 2007. In addition, the company saw a 56.52% YOY gain in revenue to RMB 17.67 bln in 1H 2008 and reached an interim EPS of RMB 0.32, with 11.06% return on equity.

The main contributors to the company's net profit growth are its asset expansion, an asset restructuring and an increase in service charges and commissions. Its 2008 Semiannual Report shows that as of 30 Jun 2008, total deposits and total loans respectively hit RMB 760.4 bln and RMB 614.05 bln, up 13.29% and 10.29% YOY. The loan-to-deposit ratio was 72.38%, down 2.06%, with bad loan provision coverage touching 114.2%. Additionally, the company's net income from service charges and commissions reached RMB 3.07 mln, up 211.88% YOY.

As for the management of property loan risk, the company stated that it had focused on and will provide more credit lines to the developed areas of eastern China, which possess great market potential, active market trading and a strong mortgage liquidity. Meanwhile, the company has adjusted and consolidated its businesses in Guangzhou and Shenzhen in consideration of the volatile housing prices in those areas.


Source: China Securities Journal

Date: 26 Aug 2008

CN01/RL/JL/BT/MM