China Merchants Bnk says Wing Lung profit impact small

Profits at China's sixth-largest lender, China Merchants Bank, will not be significantly affected by the sharp fall in earnings of newly acquired Wing Lung Bank, a top executive said in remarks published on Tuesday.

Wing Lung's profits dropped by 59.1 percent in the first half from a year earlier amid the unfolding global financial crisis.

"But Wing Lung's size is not big, and its impact on China Merchants Bank's performance for the whole year should be limited," Zhu Qi, vice president of the mainland bank, told the Financial News.

China Merchants Bank (600036.SS: Quote, Profile, Research, Stock Buzz)(3968.HK: Quote, Profile, Research, Stock Buzz) bought control of Wing Lung (0096.HK: Quote, Profile, Research, Stock Buzz) last month for $4.7 billion, giving it a presence in Hong Kong, a gateway for foreign investment into China.

Wing Lung's loan assets are very healthy with the current non-performing ratio standing at only 0.5 percent, said Zhu, who is also president of the Hong Kong bank.

He also said that Wing Lung's exposure to the interbank and bond markets were very small and most of them have been taken under control.

Repeating his solace to investors, Zhu said the deal will pay off in three to five years.