Guangdong bank reaps benefit of expertise
The capital adequacy ratio at Guangdong Development Bank, whose net profit in the first half of the year soared over 140 percent, has met the regulatory minimum of 8 percent for the first time in two decades after a Citigroup-led consortium brought it back to growth.
The ratio, the main gauge of a bank’s financial strength, rose to 8.1 percent at the end of June, the lender said yesterday.
The bank also posted earnings of 4.05 billion yuan (US$590 million) in the first six months, a massive jump of 140.54 percent from a year ago.
“The bank’s first half performance is far beyond what was planned during the five-year plan for 2007-2011,” the bank said. “The bank will accelerate the second phase of the five-year strategy and challenge first-tier domestic rivals to be a market leader.”
The bank’s outstanding bad loans fell to 8.62 billion yuan at the end of June, down 1.32 billion yuan from the start of the year. Its nonperforming loan ratio shed 0.77 percentage point to 3.23 percent.
The bank’s total loans grew 8.2 percent to 266.52 billion yuan at the end of June while total deposits rose 7.6 percent to 382.4 billion yuan.
The lender, once saddled with bad loans, returned to the black last year after a Citigroup-led consortium managed it back to health.
Citigroup, the biggest United States financial firm, and its partners, in December 2006 beat Paris-based Societe Generale SA and Ping An Insurance (Group) Co in an 18-month-long battle for a combined 85.6-percent stake in the Guangdong Province bank for US$3.1 billion.
Tags: bank, Citigroup, deposits, Insurance