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Expert: ABC may have strong performance in future

06-30-2010 14:19 BJT

AgBank's listing on the stock market has attracted world-wide attention. Experts say the lender's performance will improve after the listing, following in the footsteps of the previous three State-run banks to go public.

According to AgBank's prospectus issued earlier this month, its total assets were worth 8.8 trillion yuan, with a capital adequacy ratio of about 10 percent at the end of 2009. Total savings were measured at 4.1 trillion yuan, while total loans were 7.5 trillion yuan. The ratio of non-performing loans dropped to about 2.9 percent at the end of 2009 from 24 percent in 2007.

In 2009, the lender yielded 65 billion yuan of profits, growing about 26 percent from 2008. Experts say Agbank's profitability might not be as strong as China Construction Bank or the Industrial and Commercial Bank of China. But in the long-term, the lender has some advantages over the others.

Fu Lichun, Researcher of Southwest Securities said "AgBank's strong presence in rural areas is what others don't have."

Statistics show that about 54 percent of AgBank's branches are located in rural areas, accounting for about 12 percent of the total bank outlets in the rural market.

Fu Lichun said "If the rural economy could be upgraded successfully, then AgBank's profitability will also reach the banking average or even better."

China Construction Bank, Bank of China and Industrial and Commercial Bank of China have all benefited from listing on the stock market. Their profits have seen a big rise, while the rate of non-performing loans dropped significantly. Experts say AgBank is set to be the next big success story from public listing.

Editor:Xiong Qu |Source:

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