China tells some banks to halt new business-report

September 3, 2009

drc    BEIJING, Sept 3 (Reuters) – China’s banking regulator is refusing to allow banks with a capital adequacy ratio below 9 percent to start new lines of business or open new branches, a government researcher said in remarks published on Thursday.
   Ba Shusong, a vice director with the Development Research Centre, was quoted by the official China Securities Journal as saying that Beijing’s stimulative fiscal and monetary policies were having a positive impact but the authorities had to be wary of the risks posed by rapid lending.
   Ba’s think tank reports directly to the State Council, China’s cabinet.
   An official from the China Banking Regulatory Commission (CBRC) told Reuters that he was unaware of the reported steps against thinly capitalised banks.
   The CBRC has taken a series of steps to slow bank lending, which increased at a record pace in the first half of the year.
   Among the measures, the regulator is drafting rules to exclude cross-bank holdings of subordinated bonds from banks’ capital base. [ID:nSP529534]
   Under CBRC regulations issued in 2004, banks must have risk-weighted capital of at least 8 percent, in line with international standards.
   At the end of the first quarter, all 14 listed banks had a capital adequacy ratio (CAR) of more than 8 percent.
   The biggest listed banks had a CAR exceeding 11 percent at the end of the second quarter, with Industrial and Commercial Bank of China <1398.HK>, the country’s largest lender, at 12.09 percent, Bank of China <3988.HK> at 11.53 percent and China Construction Bank <0939.HK> at 11.97 percent. (Reporting by Aileen Wang and Simon Rabinovitch, Editing by Jacqueline Wong) ((lan.wang1@thomsonreuters.com; +8610 6627 1032; Reuters Messaging: lan.wang1.thomsonreuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))
  Keywords: CHINA BANKS/CAPITAL
  
Thursday, 03 September 2009 04:17:11RTRS [nPEK230943] {C}ENDS

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