Huaxia Bank forecasts net profit up 24% in 2008

Huaxia Bank<600015>, one of China's major private lenders, estimated that its profit would surge 24% year-on-year to RMB 47.4 billion this year, announced the Beijing-headquartered lender today.

The bank, the country's fifth listed lender, plans to increase its asset by 15% to RMB 682 billion. Meanwhile it will restrict its bad-loan ratio under 2.15% in 2008.

In its annual report to the Shanghai Stock Exchange, Huaxia Bank has posted RMB 2.1 billion in 2007 net profit, up 44.21%, lower than the 70% average increase rate among the 14 publicly traded Chinese lenders, due to a capital shortage and a constrained expansion of network.

It said earlier that it would raise RMB 11.56 billion through a private share placement to fund its business expansion. Deutsche Bank and Shougang Corp planned to buy RMB 3.91 billion worth of shares and RMB 3.94 billion worth shares respectively. China State Grid Corp will buy the remaining part.

If the transaction proceeds, Deutsche Bank's stake in the lender would rise from 9.9% to 13.7%.