Shenzhen Development Bank net profit up 43% in Q1

Shenzhen Development Bank Co said it had 3.4 billion yuan ($539.6 million) in net profit in the first quarter of 2012, up 43 percent year-on-year, the bank said on Thursday in a statement.

The bank reported having 9.7 billion yuan in total income in the first quarter, up 67 percent from the same period last year. The integrated Shenzhen Development Bank and Ping An Bank had 1,368 billion yuan in assets by March 31 and 399 outlets in 27 cities in China, according to the statement.

The bank's deposit amount increased by 8 percent from the beginning of the year to 914.8 billion yuan and its loan increased by 5 percent to 651.4 billion yuan.

The bank's loans were mainly concentrated in the manufacturing and commerce industries and in individual loans, while its bad debt was mainly in the manufacturing and commerce industries.

Richard Jackson, Shenzhen Development Bank president, said on Thursday that half of the bank's bad debt comes from small and medium-sized businesses in Wenzhou. He said he has not lost confidence, noting that 80 percent of those businesses have pledged assets to secure the debt. He believes the attention the central and local governments are paying to Wenzhou will lead to improvements there.

A proposal arose earlier this month to allow Shenzhen and Hong Kong banks to make loans to each other. But nothing to that end has been released officially.

Xiao Suining, Shenzhen Development Bank chairman, said the bank will keep a close eye on the policy. If such a measure is approved, it will benefit the company's off-shore banking business.

Founded in 1987 and headquartered in Shenzhen, Shenzhen Development Bank is one of the four banks in China that have licenses to conduct offshore banking.