Shanghai Daily news

Standard & Poor's Ratings Services has given the lowest grade to Guangdong Development Bank Co in its recent ratings on eight commercial lenders on the Chinese mainland.
Based on publicly released information, S&P assigned Guangdong Bank a CCCpi rating, far lower than the BBB grade, which indicates a bank has strong balance sheet, considerable capitalization and is suitable for investment.
"The rating reflects the bank's poor asset quality, low profitability and inadequate capitalization, as well as a high degree of information risk," said the ratings agency.
S&P also said that Guangdong Bank has high levels of nonperforming loans and low levels of loan loss provisions, and its transparency of financial details is minimal.
"The bank has, from time to time, disclosed selected figures," said S&P in its "China Financial Services Outlook 2004" report released yesterday.
Guangdong Bank disclosed, for example, that its total assets had reached 234 billion yuan (US$28.27 billion) in March but further details were skimpy.
Based in Guangzhou, capital city of Guangdong Province, the bank's ratio of nonperforming assets improved to 17.4 percent in 2001 from 25.2 percent in 2000.
"But it was still one of the highest ratios reported in 2001 by a joint stock commercial bank," said S&P, adding the fall in the ratio was due to rapid loan growth.
Agricultural Bank of China, China Merchants Bank Co and Shanghai Pudong Development Bank Co were assigned a BBpi rating by S&P.
China Everbright Bank, Shenzhen Development Bank Co, China Minsheng Banking Corp and Hua Xia Bank were given the lesser Bpi rating.
Except for ABC, the other seven banks are all joint stock commercial lenders, which have captured a market share equivalent to nearly 14 percent of the total assets in China's banking sector, said Ryan Tsang, an analyst with S&P.