Liu Minxia

    SHENZHEN Development Bank Co. said Thursday its net profit hit 5.03 billion yuan (US$737 million) last year, up 719 percent from 2008, thanks to lower provisions for bad loans and higher net interest and fee income.

    The bank, in which U.S. private-equity firm TPG Inc. owns a 16.76 percent stake, saw a 77 percent drop in 2008 net profit to 614 million yuan because of substantial provisions for bad loans and loan write-offs to meet stricter regulations.

    Last year, like other Chinese banks, the lender aggressively expanded its loan book as part of a government-led credit boom to support the economy during the global financial crisis.

    The bank’s total loans grew by 27 percent to 359.5 billion yuan, among which general loans grew by 30 percent to 314.2 billion yuan, it said in a statement to the Shenzhen Stock Exchange. Total deposits grew 26 percent from a year ago to 454.6 billion yuan by the end of 2009.

    With the surge in lending, the bank’s net interest income rose 3 percent to 12.98 billion yuan last year while its net fee and commission income surged 39 percent to 1.18 billion yuan thanks to an 80 percent rebound in China’s stock markets.

    The bank’s assets remained solid despite the surge in new loans. At the end of 2009, its core capital ratio was about 5.52 percent and its nonperforming loan ratio was 0.68 percent, it said.

    The bank is still waiting for Chinese regulators to approve Ping An’s plan to increase its ownership in the lender to 30 percent from 5 percent for US$3.2 billion.