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Ag bank sees hefty profit rise
(China Daily)
Updated: 2005-07-16 09:02
The Agricultural Bank of China (ABC) on Friday reported a hefty profit rise
for the first half of this year, along with improvements in asset structure and
loan quality.
The State-owned lender chalked up 21.8 billion yuan (US$2.6 billion) in
operating profits in the first six months of the year, up 36.4 per cent from the
same period last year.
Real spread between lending and deposit rates broadened by 0.06 percentage
points from a year earlier, while cost/income ratio dipped by 1.51 percentage
points from the end of last year, it said.
Non-performing loans declined by 2.3 billion yuan (US$277 million) from the
end of last year, while the bad loan ratio slid by 1.44 percentage points, the
bank said. It did not reveal the figures for the end of June.
The bank attributed the improvement in performance to its efforts for
efficiency in resource allocation, strengthening capital restraint, and
optimizing business structure.
The bank said it tightened lending policies on such industries as steel,
cement, aluminium, automobiles and property in the first half of the year, all
areas the State is trying to slow down.
New loans, both in the local currency and foreign currencies, totalled 136.9
billion yuan (US$16.5 billion), down 36 per cent on a year-on-year basis, but
the percentage of loans made to quality clients rose by 52 per cent, it said.
The structure of its income also improved, with intermediary services
accounting for 5.24 per cent of total income, up 0.49 percentage points from a
year earlier.
The bank also said its source of funding became more stable in the past six
months, with the percentage of term deposit increases rising by 25.6 percentage
points.
Chinese banks are facing a widespread problem of term mismatches in deposits,
as residents showing reluctance to make term deposits, given the expectations of
further interest rate hikes.
The ABC, widely seen as the weakest of the nation's Big Four State-owned
commercial banks in terms of capital strength, is still waiting for authorities
to approve its joint-stock reform plan.
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