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Minsheng says UCB closure no major impact on profit

(Xinhua)
Updated: 2009-11-10 16:24

China Minsheng Banking Corp said Tuesday that the closure of California-based United Commercial Bank (UCB) had "no major impact" on its operations and profitability.

Minsheng had set aside "relatively adequate" provision for asset impairment related to its investment in UCB, the lender said in the statement to the Shanghai Stock Exchange.

Minsheng invested 887 million yuan ($129.9 million) for a 9.9 percent stake in UCB, and it had booked an 824 million yuan write down on losses on its stake in the bank, according to the statement.

Shares in Minsheng, which is planning for an initial public offering in the Hong Kong stock market, rose 0.12 percent to 8.12 yuan Tuesday in Shanghai.

UCB, which has a subsidiary, United Commercial Bank (China) Limited, in Shanghai, was closed by the US regulators last week, and was acquired by the East West Bank.

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The China Banking Regulatory Commission (CBRC) said in a report Saturday that UCB (China) was operating well with 2.67 billion yuan of total assets, 1.75 billion yuan of total liabilities and 913 million yuan of net assets.

Emily Wang, director of marketing for the East West Bank, told Xinhua in an e-mail Tuesday, "The acquisition will not affect the operations of the former UCB in China at all.

"It will be business as usual for a while. After we stabilize the operations we will consider growth and expansion," Wang said.

The CBRC said foreign banks were operating normally in China, with capital adequacy ratios at 21.14 percent, liquidity ratios at 59.01 percent, bad loan ratios at 1.06 percent and loan loss provision adequacy rates at 123.55 percent.

The CBRC would continue to protect the interests of depositors and other financial clients through effective monitoring and transparent information release, said the report.