While more banks forecast a rosy profit in the first quarter yesterday, the sector expects to see a slowdown in full-year profit growth.
Huaxia Bank Co, the Chinese lender partly owned by Deutsche Bank AG, said in a filing to the Shanghai Stock Exchange yesterday that its first-quarter profit probably rose more than 80 percent due to improved margins and higher fee income. The mid-sized bank also cited a lower tax rate for the profit growth.
China has implemented an unified corporate tax rate of 25 percent since January. Previously, foreign companies were taxed at an average 15 percent while Chinese firms were taxed 33 percent or a de facto average rate of 25 percent after various tax deductions, said the Ministry of Finance.
Huaxia Bank, based in Beijing, didn't give a profit figure for the first quarter of this year in the statement. Net income was 455 million yuan (US$65 million) in the first quarter of 2007, it said.
Bank of Beijing, also forecast a profit surge yesterday.
The bank, the Chinese partner of ING, said it expects first-quarter profit jumped more than 180 percent from a year earlier. Its income in the first quarter of 2007 hit 550.6 million yuan.
China's listed firms need to make a preliminary disclosure if they expect profit to rise or fall more than 50 percent in a reporting period.
"The slowdown in profit growth in the banking sector this year is more likely,'' She Minhua, a China Securities Co analyst, said. "The tight monetary moves will take its toll on banks, with the impact likely to appear in the second half of this year.''
(Shanghai Daily April 23, 2008)
