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China Merchants Bank denies losses from subprime mortgage crisis (2) |
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08:32, August 15, 2007 |
Nevertheless, Ma said, the U.S. subprime crisis had sounded the alarm for Chinese banks and that CMB would adopt a more prudent policy for its mortgage business.
The CMB said in the interim report that its net profit surged by 120.38 percent in the six months of the year to read 6.12 billion yuan.
The bank attributed the substantial profit increase to the steady growth of commercial loans, business expansion, assets structure adjustment, widening interest rate margin and continuously rapid growth of non-interest business such as credit card services, according to the statement.
The CMB was rated the best in the general category for its popular dual-currency credit card, according to a survey conducted by the Chinese credit card portal 51credit.com and Shanghai-based poll firm 51poll.com earlier this year.
Two of the Big Four banks, however, have admitted to having been affected by the subprime crisis though neither Bank of China nor China Construction Bank has disclosed the extent of their exposure to the subprime market, according to media reports.
The current crisis began as subprime mortgage defaults started to spiral as a result of higher interest rates and the bursting of the U.S. housing bubble. It has been dragging down world''s major stocks for weeks and making it difficult for the U.S. and European banks, which bought much of the repackaged subprime debts, to resell it as its value dropped with serial defaults and bankruptcies.
But experts hold that the crisis has little impact to the Chinese mainland because its exposure to the U.S. subprime lending market is relatively limited.
Source: Xinhua
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