Shanghai Pudong Development Bank Expects a 4.93% Increase in Net Profit for 2016


  • In its preliminary earnings report, the Shanghai Pudong Development Bank (600000.SS) expects a 4.93% increase in net profit for 2016 to RMB 53.1 billion, as reported by Securities Times.
  • The bank also expects a 9.72% increase in revenue to RMB 160.7 billion.

Why It Matters:

  • Shanghai Pudong Development Bank is the first Chinese bank to reveal its 2016 preliminary earnings report. As such, it is an important benchmark for investors and a potential indicator for other large banks.
  • In 2016, the bank posted a 16% increase in total assets to RMB 5.8 trillion and a 16.75% increase in net asset to RMB 367.9 billion.
  • In terms of non-performing loans (NPLs), the bank reported that the NPL ratio increased to 1.89% from 1.56% at the beginning of 2016. Overall asset quality is sound. In 2016, Chinese commercial banks significantly increased their risk exposure to residential mortgage loans, which currently have low default risks. However, a collapse of the housing bubble may create a ‘fat tail’ event and totally change the scenario.