Merchants bank's net beats expectations
(Xinhua)
Updated: 2005-08-22 10:54

China Merchants Bank Co posted its eighth straight quarter of double-digit earnings growth, beating expectations as its lending was less affected by nationwide curbs on credit.

China's largest domestically listed lender posted a net profit of 1.08 billion yuan (US$133.3 million) in the April-June quarter, up 23 percent from 878.7 million yuan a year ago.

Revenue rose 19.5 percent to 11.34 billion yuan in the first half. Four analysts had offered a mean forecast for net earnings of 970 million yuan.

Analysts say China Merchants Bank, with its loan portfolio skewed toward energy and transport, should fare better than rivals as the government clamps down on lending and investment in overheated sectors from steel to automobiles.

Merchants bank's loans growth could accelerate in the second half of this year --boding well for net profit -- as the government urges its banks to lend more in an effort to combat an anticipated economic growth slowdown.

"If there are no big changes to macroeconomic policy, say to rein in credit, in the second half, we believe the bank's loan growth will keep up its current pace," said Wu Yonggang, a senior banking analyst with Guotai Junan Securities.

Full-year 2005 earnings are expected to rise about a quarter to 3.89 billion yuan, according to eight analysts, well off the 41 percent surge logged in 2004.

Based in Shenzhen and backed by the ports-to-roads China Merchants Group, the bank's ratio of non-performing loans slipped to 2.6 percent at the end of June from 2.7 percent at the end of March.

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