China Minsheng 2009 profit up 53% at $1.8bln

Lender's earnings report excludes its $130mln investment in UCBH Holdings that upset its proposed overseas expansion.

China Minsheng Banking Corp. said Monday its 2009 net profit surged 53% despite losses from its investment in San Francisco-based UCBH Holdings Inc., as the sale of its stake in a major Chinese brokerage boosted investment income.

The medium-sized bank, which raised almost $4 billion in an initial public offering in Hong Kong last year, said its net profit for the 12 months ended Dec. 31 was CNY12.10 billion ($1.8 billion), up from CNY7.89 billion ($1.16 billion) the previous year.

However, excluding the one-off CNY5.46 billion ($799.83 million) investment income from the sale of its stake in Haitong Securities Co., Minsheng Bank's net profit fell 16% in 2009, highlighting that Beijing's $586 billion stimulus package largely bypassed the country's private sectors. Unlike its peers, China Minsheng Bank is controlled by a group of private companies.

Also, the bank's ill-timed investment in the U.S. financial sector was a drag on its earnings and hurt its planned overseas expansion.

China Minsheng Bank said in the earnings statement that it had to write off all of its $130 million investment in UCBH Holdings, after U.S. regulators in November shut UCBH's core banking business because it misstated financial reports and had massive losses on loans.

View the full story in the Wall Street Journal.