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April 1, 2008 |
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HUAXIA BANK: Targets Slower Profit Growth at 24% Shanghai Daily reports that Hua Xia Bank Co. has targeted a slower profit growth of 24% this year on a tight monetary policy. According to the report, the bank targeted a gross profit of CNY4.74 billion (US$676 million) in 2008 after its profits grew 58.46% to CNY3.82 billion in 2007. The bank plans to curb its non-performing loan ratio within 2.15% this year, down from 2007's 2.25%, Zhang Fengming of Shanghai Daily reports. It would also target a total assets growth of 15% to CNY682 billion, the report adds. The bank told Shanghai Daily that it aims to raise CNY11.56 billion in a private share placement to finance loan growth and network expansion. Hua Xia Bank would sell CNY3.91 billion of shares to Deutsche Bank and CNY3.94 billion of shares to Shougang Corp, while the rest would be sold to China State Grid Corp., the report states. Headquartered in Beijing, Hua Xia Bank Co., Limited -- http://www.hxb.com.cn -- is a commercial bank that offers financial services to both corporate and individual clients. At the end of 2005, it had 27 branches and 257 offices nationwide. On September 21, 2005, Deutsche Bank entered into a preliminary agreement to purchase a holding of about 10% in Huaxia Bank, a medium-sized Beijing-based lender, for about US$200 million. People close to the situation said Deutsche had teamed up with another European financial institution to buy a total of about 15 per cent in Shanghai-listed Huaxia for more than US$300 million -- a slight premium to its market value. Fitch Ratings affirmed on September 5, 2006, Hua Xia Bank's Individual D/E and Support 4 ratings. Fitch said Hua Xia Bank's Individual D/E rating reflects its weak capital position, inadequate profitability, and potential asset quality risks stemming from very rapid loan growth. Total loans expanded 29% in 2005, the second fastest growth among local peers. |
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