China banks in no need of big financing

Updated: 2011-05-04 14:39


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BEIJING - China's major banks have largely met stringent new regulations concerning capital requirements, and no large-scale capital supplements are needed, an official with China's banking regulator has said.

In an effort to limit potential risks in China's credit expansion, the China Banking Regulatory Commission (CBRC) said on Tuesday that it would set the minimum capital adequacy ratio at 11.5 percent for banks of systematic importance, while the ratio for banks with non-systematic importance will be set at 10.5 percent.

This new regulation will go into effect on January 1, 2012, according to the commission. Banks of systematic importance will be required to meet the new standards by the end of 2013, while banks of non-systematic importance will be required to meet them by the end of 2016, the commission said.

"China's major commercial banks can largely meet the new standards. The capital gap is quite small," the China Securities Journal quoted an anonymous official with the CBRC as saying in Wednesday's report.

The banking industry will mainly rely on internal capital accumulation over the next five years to meet the regulatory standards, the official stated. With the expansion of the domestic capital market, new financing demands by banks will not shock the market, the official said.

The official added that China's banks should pay more attention to improvements in their lending structure and quality as the country tries to shift to a healthier economic growth pattern during the 12th Five-year Plan period(2011-2015).

Data released by the CBRC showed that the average capital adequacy ratio of Chinese commercial banks stood at 12.2 percent by the end of the fourth quarter last year.


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