China Minsheng Banking Corp said yesterday its net profit surged 43 percent last year to 3.83 billion yuan.

The bank attributed its profit growth to enlarged business scale, increased income from loan interest, product and service innovations and strengthened cost management.

Turnover surged 33 percent to 28.8 billion, the bank said in its annual report to the Shanghai Stock Exchange.

Assets totaled 700.4 billion yuan by the end of 2006, an increase of 142.9 billion yuan over a year ago.

Its non-performing loans ratio fell to 1.23 percent from 1.28 percent a year earlier.

The bank's solid performance drove its share price up 7.89 percent to 11.9 yuan yesterday.

Minsheng said yesterday it had finalized the details of a private placement of shares that would raise 18.2 billion yuan, to support its rapid development.

The share placement would boost Minsheng's capital adequacy ratio to about 13 percent, the bank's chairman Dong Wenbiao said earlier. It was 8.12 percent in 2006.

The 2 billion new A shares make up about 16 percent of the bank's expanded share capital and will be issued to seven domestic institutional investors at 9.08 yuan apiece.

New Hope Group, which founded Minsheng and is headed by private entrepreneur Liu Yonghao, and an affiliated company will take a total of 410 million shares. This will preserve Liu's position as the bank's biggest shareholder.

China Life Insurance Co and Ping An Insurance will each take 600 million shares, making them among the bank's top 10 shareholders.

Minsheng said it aimed to increase its net profit by 38.3 percent to 5.3 billion yuan for 2007. The bank would seek diversified businesses such as investment banking, assets securitization and financial leasing, it said.

It said it would jointly set up a financial leasing company in Tianjin with China Power Finance Co Ltd and a Tianjin-based firm.

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