Wednesday, August 27, 2008

Chinese banks report surging profits across the board

Everyday when you flip through news channels or search through online or print media you'll probably see something about a US Bank or Financial Institution that has more bad news to report... Falling profits, cutting dividends, government bail outs, new credit losses, etc.

Well... Not in China.

1 -- China's "Fiscal Revenue" and total Banking Assets -- Lets set the tone by beginning with China's latest figures on its fiscal revenue and its total banks' assets. According to Xinhua, China's state media, China's fiscal revenues int he first 7 months of 2008 reached 4.088 trillion yuan or in US dollars $597.6 billion.

Total banking assets, reported by the China Banking Regulatory Commission (CBRC) have reached what I thought at first was a typo.... $8.5 trillion US dollars as of June... See full article for further details on the China's piggy bank.

Click here to access the full article from Xinhua about China's Fiscal Revenue
Click here to access the full article from Xinhua about Chinese Banking Assets

2 -- China's Industrial and Commercial Bank becomes the most profitable bank in the world -- China's ICBC recently became the world's most profitable bank, emerging as bright star of hope in the troubled world of banking. After-tax profit in the half of 2008 totalled 64.88 billion yuan or $9.47 billion US dollars, making it the most profitable bank in the world. Furtermore, the bank is now world's largest by market value with total assets hitting 9.4 trillion yuan or a outstanding $1.37 trillion US dollars. Yes... I did cite that correctly -- TRILLION. Check the article on Xinhua and do the conversion (they provide the figure in yuan) yourself if you don't believe me.

Click here to access the full article for further details on non-performing loans, net fees, commission income, etc. Courtesy of Xinhua

3 -- China's Bank of Communication profit rises 81% for the 1st half of 2008 -- China's fifth largest commercial bank has reported according to Xinhua that profits are up 81% over the same period last year. Net profit came in at 15.51 billion yuan or $2.3 billon US dollars, measured by Internationally Accepted Account Standards. This translates to 0.32 yuan per share, said the Shanghai based lender on Wednesday.

The Banks total assets are valued at 2.43 trillion yuan, about $351 billion US dollars. This represents as reported by the bank a increase of 15.8% from its total assets as of the same time last year. Outstanding loans also increased substantially, totaling 1.22 trillion yuan, roughly $175 billion US dollars, a increase of 16.43% from last year.

Click here to access the rest of the article from Xinhua

4 -- Shanghai Pudong Development Bank Co. reports net profit up 149% -- One of the first banks in China to accept foreign investors, Shanghai Pudong Development Bank which is partly owned by Citigroup said this past Saturday profits for the first half of 2008 soared a whopping 149.62% from the same period in 2007.

The bank reports the huge increase in profits is a result of increasing loans, lower corporate income tax rates and greater fee income. Net profit was 6.38 billion yuan, about $933 million US dollars or 1.12 yuan per share.

Click here to access the full article from Xinhua

5 -- China Minsheng Banking Corp. reports first-half profits more than double -- Minsheng Bank announced yesterday profits for the first half of 2008 surged 114.29% when compared to the same period last year. The lender reported in its half-year report net profit was 6.046 billion yuan, about $880.6 million US dollars.

Minsheng reports commission charges and fees income surged 3.072 billion yuan, representing a increase in this area of 211.88% over last year. Despite currently having 612.05 billion yuan in outstanding loans, up 10.29% from 2007 and 7.39 billlion yuan in non-performing loans... the bank has reported its "non-preforming loan ratio" was down 1.21% and that much of their current debt is held in equity and bonds from Fannie Mae and Freddie Mac...

In other words (my opinion now), this bank which I recall only entered the international stage in 2006 when I was resiging in China can conviently use the economies woes of Freddie and Fannie Mae in the US to blame much of its bad debt on. Banks in China definetely are not immune to default and non-performing loans... but as one can see this bank in particular can blame Freddie and Fannie for about 1.56 billion yuan of its "bad debt." All in all, I'm sure the execs and people over at Minsheng have far less to fret about than Citigroup, JP Morgan Chase or Wachovia do...

Click here to access the full article from Xinhua

6 -- China's Merchants Bank reports 116% rise in first half profit -- During the first half of 2008 net profit for China's Merchant Bank was 13.23 billion yuan ($1.92 billion US dollars). This represents a increase of 116.42% from 2007. Net interest income accounted for a large chunk, bringing in 83.91% of its total income, while non-interest income generated 16.09%.

The bank stated the surge in net profit was mainly a result from the rapid growth of earnings on net interest, as well as sustained rapid growth of non-interest income.... Like Minsheng (look above), the bank said as of June 30th, much of its "bad debt" was in the form of Freddie and Fannie Mae bonds with a face falue of $180 million US dollars, allowing yet another Chinese bank to point the finger at the US when explaining to its shareholders some of the negative points in its financial position and accounting sheets during the first half of 2008.

Click here
to access the full article from Xinhua

7 -- Argicultural Bank of China profit up 39% in first half of 2008 --
The Agricultural Bank of China (ABC) has stated domestic pre-tax operating profits rose 39 percent year-on-year to 54.3 billion yuan (7.95 billion U.S. dollars) for the January-June period.

Click here to access the full story from Xinhua

Dear Readers --

I must apologize for the lack of good quality updates these past few weeks. New responsibilities and traveling have kept me busy and left me little time to be a news hound to the extent I have been this past year or so.

As a result I've decided to start a new routine with this website. I will from this point forth make updates 2-4 times a week. The new style and form of these updates will consist of various links to news worthy stories from the previous days concerning commodities, south-south cooperation, international finanance, political developments (focusing on China and South America) and other relevant events from online media/ scholarly writings. Each post will also include my own personal analysis of the news articles and or about the underlying topic from their content.

I also wanted to mention that as of September 15th I will be moving out East. I begin a short trip to Singapore and Japan for 2 weeks on the 15th and will eventually be settling up shop in China in early October. I look forward to providing the best analysis of this rising, commodity hungry super-power from the ground up to all readers.

Of course you may begin to notice less links to places such as BBC, CNN (whom I don't think I've really ever used as a source here since I despise them by and large), and more links to Chinese media and other media sources that use content from AP, Reuters or Bloomberg but don't rise the same red flag some sites illicit when trying to be accessed from China. (I may even end up deleting this post before I get there). China is a great country, and despite my love of fast and free internet one must respect the rules of ones host-- that is the sensitive barriers the country has in place to prevent "un-desirable" content from being published or accessed on the web.

Thanks and apologies to my daily readers that I will no longer be able to provide "breaking news" updates. I do promise to up the quality of my analysis and keep you posted with good news you won't hear about as you watch the mind-numbing media of today's world (CNN, Fox News I mean you).