China Zheshang Bank replenishes capital in H1

Zhejiang-based and Hong Kong-listed commercial lender China Zheshang Bank said funds raised through its A-share listing plan will be used to support the real economy, loans to small and medium-size enterprises, intelligent manufacturing and its three major platforms for liquidity services.

The bank's A-share offering and listing plan is now progressing steadily and orderly, Vice President Liu Long said on Monday when announcing first-half interim results.

He added the listing plan is proposed to realize the bank's fundraising structure of A-shares plus H-shares.

Zheshang Bank replenished its capital in the first half. It issued 759 million new H-shares in March and raised about 3.6 billion yuan ($527.6 million) for the bank's core tier one capital, a key measurement of a bank's financial strength.

The lender submitted an initial public offering of A-shares prospectus to the China Securities Regulatory Commission at the end of June, planning to be go public on the Shanghai Stock Exchange. No more than 4.49 billion shares will be issued, accounting for 20 percent of the total issued capital. Proceeds from the A-shares offering also will be used to enhance its capital adequacy ratio.

The bank reported a net profit of 6.49 billion yuan for the first half of this year, up 15.54 percent year-on-year. Operating revenue for the period was 18.6 billion yuan, an increase of 3.61 percent.

Net interest income increased 1.94 percent to 12.63 billion yuan, while net non-interest income rose 7.32 percent to 5.97 billion yuan.

Among net non-interest income, net fee and commission income dropped. Fee income from asset management service was 77.97 percent down compared to the same period of last year, due to the decrease in the scale of wealth management and average yield for the period.

But active investment in bonds and public offering funds brought hugely increased net gains on trading activities.

Looking ahead, the bank said it will continue to build itself up as a corporate liquidity service bank by focusing on the establishment of its three platforms for liquidity services.

The three platforms - pooled financing platform, integrated service platform Yiqiyin and blockchain accounts receivable chain platform - will help enterprises with deleveraging and cost reduction, Shen Jinfang, the bank's vice president of corporate banking department, said.

With the bank's Hong Kong branch opened in April, it also will introduce these financial technology products there, Liu added.