Chinese securities firms see profits halved in 2011

Dismal capital markets in China have seriously impacted the performance of the country's securities firms and nearly halved their profits in 2011, according to the latest figures from an industry association.

Chinese securities companies posted an annual profit of 39.38 billion yuan (6.24 billion U.S.dollars) in 2011, just half of the 2010 level, according to the Securities Association of China (SAC).

A total of 109 securities firms achieved operating income of 135.95 billion yuan last year, a 30-percent-drop from 192.65 billion yuan in 2010, the SAC said.

Despite a drastic year-on-year decline, the brokerage business made the largest contribution to the income, bringing 68.89 billion yuan to the industry in 2011. The figure was 107.6 billion yuan in 2010, it said.

Affected by the weak performance of the country's securities markets, total assets of the Chinese securities industry shrank from 2.03 trillion yuan in 2009 to 1.57 trillion yuan in 2011, while net profits dropped from 93.27 billion yuan to 39.38 billion yuan in the same period.

As a result of tightened bank lending, the battered real-estate sector, and weak external demand, China's benchmark Shanghai Composite Index dropped 21.68 percent for 2011, while the Shenzhen Component Index was down 28.41 percent cumulatively last year.