CHINA'S FIRST JOINT VENTURE BANK REPORTS PROFIT
China's first joint venture bank, Xiamen
International Bank (XIB), reported a group net profit of about
14 mln Hong Kong dlrs in 1986, the bank's first full year of
operation.
    General manager Liu Shuxun declined to give a 1987 profit
forecast, saying targets were under study.
    Assistant general manager Wang Hongshan said the group's
outstanding loans at end-1986 totalled 620 mln Hong Kong dlrs,
up from 530 mln at end-1985. Deposits and interbank borrowings
rose to 680 mln dlrs from 550 mln, he told Reuters.
    Liu said most of the group's profit came from the parent
company rather than its two wholly-owned subsidiaries <Xiamen
International Finance Co Ltd> in Hong Kong and <Luso
International Bank Ltd> in Macao.
    The joint venture bank began operating in September 1985
but did not officially open until March 1986.
    Liu said the share in the joint venture of the foreign
partner, Hong Kong-listed <Panin Holdings Ltd>, had been cut
last year to 49 pct from 60 pct. This was done because foreign
banks felt the XIB's reputation would be improved if the three
Chinese partners collectively held a majority stake, he said.
    Liu said news reports about problems concerning Panin were
unfounded, but he did not elaborate. Panin Holdings reported a
loss of 1.99 mln Hong Kong dlrs in 1986 after a net profit of
268,000 dlrs in 1985.
    The Chinese partners are Industrial and Commercial Bank of
China, Fujian branch, whose share rose to 23.5 pct from 15,
Fujian Investment and Enterprise Corporation 17.5 pct (15) and
Xiamen Construction and Development Corporation 10 pct (10).
    One foreign banker said Xiamen International Bank faced the
same problems as foreign bank branches in trying to compete on
unequal terms with state-owned banks.
    The foreign banking market in Xiamen is thin and almost
saturated, he added.
    Officials of the joint venture bank said they benefitted
from contacts made through its three Chinese partners. But the
foreign banker, who asked not to be named, said it faced
internal competition from the Industrial and Commercial Bank.
    Apart from Xiamen International Bank and the International
Agricultural Development Bank planned by the World Bank and the
state-owned Agricultural Bank of China, Xiamen has eight
foreign bank branches or representative offices, mostly of Hong
Kong or overseas Chinese banks.
 REUTER
