Shenzhen Development Bank's 2010 net profits up 25%

Shenzhen Development Bank posted a 25 percent year-on-year increase in 2010 net profit to 6.28 billion yuan, with earnings per share of 1.91 yuan per share, up 18 percent, the bank's annual report indicates.
The bank reported its non-performing loan ratio fell by 0.1 percentage point to 0.58 percent.
Provision-coverage ratio rose 109.7 percentage points from the previous year to 271.5 percent.
According to the annual report, the Shenzhen-based lender recorded steady growth in both assets and liabilities in 2010. The interest rate spread was unchanged from the previous year and the bank had relatively good asset quality.
The bank focused on supply chain financing and on the retail sector in 2010. In addition, it opened two new branches, with one each in south China and east China.
Shenzhen Development Bank had 304 outlets as of the end of 2010. Total assets rose 24 percent year on year to 727.6 billion yuan, while the total loan balance, including discounts, increased 13 percent to 407.4 billion. The net interest rate spread was nearly 2.5 percent.
The bank earned net interest income of 15.8 billion yuan in 2010, an increase of 22 percent year on year. The rise in net interest income was attributed to the increase in assets, which generated interest income and an improved asset and liability structure.
Non-interest income rose 3 percent year on year to 2.19 billion yuan, of which commission fees and charges contributed 1.6 billion yuan, up 34 percent year on year.
Operating expenses were up 17 percent year-on-year and the cost-to-income ratio excluding corporate tax hit 40.84 percent, 0.92 percentage points lower than the 41 percent recorded in the previous year.
Total equity hit 3.5 billion shares after the private placement of 380 million shares to Ping An Life Insurance, which raised the core capital to 6.9 billion yuan.
The bank's capital adequacy ratio at the end of 2010 was 10.19 percent, while the core capital adequacy ratio hit 7.10 percent.