SHANGHAI, Apr 29 (Reuters) Pudong Bank, part-owned by U.S. financial giant Citigroup Inc., posted on Saturday a 29 percent rise in first-quarter net profit, helped by its network expansion and strong loan growth.
Pudong Development Bank Co Ltd, China's third most valuable lender, said it earned 662.67 million yuan ($82.69 million) in the first quarter of 2006, versus 513.76 million yuan in the same period last year.
''With the big support from regulators, the company has improved its existing business network and has launched new branches in Shanghai and other cities, bringing the total number of branches to 356,'' Pudong Bank said in its filing to the Shanghai stock exchange (www.sse.com.cn).
The bank also attributed its profit growth to its strong loan and deposit expansion in the quarter.
Citigroup, the world's largest financial group, owns 4.6 percent of the Shanghai-based lender and the U.S. bank has said it agreed to increase its holdings in the Chinese bank to the current legal ceiling for a single investor of 19.9 percent.
Pudong Bank's outstanding loans rose to 406.7 billion yuan in the quarter from 377.2 billion yuan at the end of 2005.
The bank's deposits also climbed to 529.6 billion yuan at the end of March from 505.6 billion yuan by end-2005.
Its non-performing loans ratio slipped to 1.91 percent on March 31 from 1.97 percent at the end of 2005, far lower than the national average of 8 percent.
The mid-sized lender, which recently agreed to let Citigroup quadruple its stake in the bank and buy into another Chinese lender, said in its 2005 annual report that it expected its profit to grow by 25 percent in 2006.
Pudong Bank, the third largest Shanghai-listed lender, had also said it expected its non-performing loan ratio to be around 1.85 percent by the end of 2006.
Beijing is eager to entice foreign cash and expertise into a murky sector saddled with $200 billion in bad debt, an effort that has lured billions of dollars from investors such as HSBC Holdings Plc. and Bank of America All are scrambling to establish a foothold in the world's fifth-largest economy -- with more than $1.7 trillion in personal savings -- ahead of near-full liberalisation of its financial services by the end of this year.
($1=8.014 Yuan) REUTERS PV HT1153