Bank's net rises on more interest income | Shanghai Daily

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October 30, 2009

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Bank's net rises on more interest income

HIGHER interest income propelled third quarter profit at Shanghai Pudong Development Bank by 4.5 percent, the lender said yesterday.

The bank, partly owned by Citigroup Inc, also said it has approval from its board of directors to set up a representative office in London and to upgrade its representative office in Hong Kong to a branch as it seeks to expand its overseas business, according to a separate statement to the Shanghai Stock Exchange.

Its net income rose to 3.51 billion yuan (US$514 million) in the third quarter from 3.47 billion yuan a year earlier. Its operating revenue jumped 7.5 percent to 9.67 billion yuan from a year ago in the July-September period. Net interest income, meanwhile, climbed to 8.84 billion yuan in the period.

The bank's capital-adequacy ratio, the main measure of banks' financial strength, rose to 10.16 percent by the end of September, from 8.11 percent at the end of June, after it raised 15 billion yuan in a private placement in September. But the ratio still lags the 12 percent set by the China Banking Regulatory Commission.

"The company needs to raise more funds to meet the regulator's requirement and fulfill its expansion plan," said Yang Sen, an analyst at Xiangcai Securities Co.

Pudong Development said earlier it will tap several channels to boost its capital.

Analysts said the options may include raising funds in Hong Kong and selling convertible bonds.




 

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