SENSING slower growth in lending this year, Bank of Communications targets the Chinese mainland's securities and insurance markets as it bids to enhance its all-around financial capability, its vice president said yesterday.
The bank aims to grow into a comprehensive financial entity with interests in banking, insurance, brokerage, trust and financial leasing within three years, said Qian Wenhui, vice president of the bank. Insurance and securities are the only two areas which the bank has not moved into on the mainland.
BoCom's lending grew 19 percent last year and Qian expects the growth to slow amid tight monetary policies imposed by the central government.
The bank said yesterday its first quarter profit more than doubled on a widening interest spread.
Net income at the bank rose to 7.89 billion yuan (US$1.13 billion), a 107.7 percent surge from a year earlier, the Shanghai-based bank said.
BoCom's interest income grew 50.16 percent to 16.52 billion yuan while fees and commissions rose 70.28 percent to 2.06 billion yuan.
BoCom's net interest margin rose to 3.19 percent last year from 2.66 percent a year ago. The People's Bank of China raised interest rates six times last year, leaving commercial banks with a larger margin.
Qian also said he didn't expect the bank's share price to decline in May when the lock-up period on its 13.24 billion shares will expire. He said most of the shareholders won't sell the lock-up shares as they are long-time holders.
BoCom's bad loan ratio dropped to 1.93 percent at the end of March, down from 2.05 percent at the end of 2007. Its debt coverage jumped to 1.77 billion yuan, up 41.73 percent from a year ago. The bank paid 2.34 billion yuan in tax in the first quarter, 30.7 percent less than in the same period a year earlier.
The bank added 0.77 percent to 10.48 yuan yesterday in Shanghai while the Shanghai Composite Index rose 1.40 percent to 3,523.41.