China Minsheng Banking Corp, the mainland's first privately owned lender, said it won't seek more capital from the equity markets in the near future after having raised almost HK$31 billion in its initial public offering in Hong Kong last November.

"We may consider issuing bonds in the medium term to further shore up our capital base," Zhao Pingzhang, vice-president of the mid-sized lender said during a conference call about the company's annual result Tuesday.

Minsheng reported Monday a 53 percent increase in its net profit for 2009 to 12.1 billion yuan, thanks to an economic recovery and a government-led stimulus package that boosted demand for loans and financial services.

Hong Qi, president of the bank, told the same press briefing that recent tightening measures by the central government on mortgage lending will not affect Minsheng's business significantly, as mortgage lending accounts for only around 11 percent of its entire loan portfolio.

"The tightening up will hit the property market shortly, but for the long run, these policies guarantee a healthy development in this sector, which is also conducive to sound credit business among Chinese banks," said Hong.

Two days after releasing policies to tighten requirements on both down-payment and mortgage rates, the State Council last Saturday asked banks to stop providing loans to third-home purchases in cities where property prices are rising too fast.

Vice-president Zhao said the trend of the bank's profitability in the first quarter was quite good. The bank is due to report its first-quarter earnings results next Thursday.

The bank's net interest margin, a measure of lending profitability, narrowed to 2.59 percent in 2009 from 3.15 percent in the previous year, which is still the highest level among its peers.

Zhao said if interest rates rise in the year, the net interest margin is likely to broaden again.

The bank's capital adequacy ratio, which measures the minimum amount of funds banks must hold against their risky assets, rose to 10.83 percent at the end of 2009 from the previous 9.22 percent. China requires banks with a national presence like that of Minsheng to have a ratio of at least 10 percent.

China Daily

(HK Edition 04/21/2010 page3)