THE Shanghai Pudong Development Bank plans to invest in Laishang Bank to expand beyond its home base.

Pudong Bank's board has agreed to buy into the biggest city commercial lender in the eastern Shandong Province, Pudong Bank said yesterday in a statement to the Shanghai Stock Exchange.

The Pudong bank didn't disclose further details of the deal.

Laishang Bank has 22 outlets in the city of Laiwu in Shandong. The bank had 12.9 billion yuan (US$1.9 billion) in assets and 307 million yuan net income in 2007, according to Laishang's Website.

Pudong Bank is one of the four Shanghai-based lenders. Its bigger peer, Bank of Communications, has won regulatory approval to buy 10 percent of Changshu Rural Commercial Bank, which is seeking listing this year.

Pudong Bank is also to invest as much as 37.5 million yuan to establish a 50-million-yuan rural bank in Mianzhu city in southwestchina's Sichuan Province, the bank said in its statement.

Pudong Bank will own no more than 75 percent and no less than 51 percent of the unit with an investment of no less than 25.5 million yuan.

The bank also said yesterday it didn't find any irregularities in affiliated companies' lending in an internal check.

Pudong Bank said earlier this month that its profit probably jumped by more than 140 percent in the first half from 2.55 billion yuan a year earlier.

The tight monetary policy this year led to limited resources for lending and helped shore up lenders' interest pricing.

Pudong Bank ended at 20.81 yuan yesterday in Shanghai, down 4.67 percent. The benchmark Shanghai Composite Index decreased 2.65 percent to 2,705.87.