SHANGHAI Rural Commercial Bank expects its pre-tax profits to more than double this year with a stable profits growth and a cut on provision, the bank's president said yesterday.
The bank's pre-tax profits are expected to grow to about 1.7 billion yuan (US$241 million) this year and rise further to 2.5 billion yuan next year if the bank's business goes smoothly without a major change in the economy, Hou Funing, president of the bank, said yesterday.
The bank's pre-tax profits sat at 756 million yuan last year, up 59 percent on a year previously. The bank allocated a provision against bad loans of 1.8 billion yuan last year, mainly to cover its historically soured loans.
The provision will slide in the following years as the historical burden has almost been covered, said Hou.
He also said the bank is looking at listing and expanding outside of Shanghai but declined to set a timetable.
The bank is looking to offer credit cards and online banking to boost its retail business.
The bank's outstanding deposits sat at 128.4 billion yuan at the end of 2007, accounting for 4.75 percent of the city's total as the No. 8 player. It contributed to 4.98 percent of the city's total bank lending with outstanding loans of 82.7 billion yuan.
The bank's capital adequacy ratio sat at 9.16 percent at the end of last year, up over the eight percent regulatory minimum.
Its total assets grew 13.98 percent to 155 billion yuan. Bad loans dropped 210 million yuan to 1.94 billion yuan and the non-performing loans ratio decreased 0.57 percentage point to 2.34 percent at the end of 2007. The bank was established in August 2005 with the merger of rural cooperatives in the city.