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Bank of China in US$73b credit boost
By Luo Jun |
March 7, 2009, Saturday
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Print Edition
Print Edition
THE Bank of China Ltd is to offer at least 500 billion yuan (US$73 billion) in new loans this year, boosting credit along with other banks after the government directed them to support the economy.
Premier Wen Jiabao this week set a new loan growth target of 5 trillion yuan for this year as he prods banks to help support a 4-trillion-yuan stimulus package. Collapsing exports have dragged the world's third-largest economy to its weakest growth in seven years and cost the jobs of about 20 million migrant workers.
Domestic lenders offered a record 1.62 trillion yuan in new advances in January, more than double the previous all-time high set a year earlier, according to central bank data. The Bank of China Chairman Xiao Gang yesterday said the company needed to balance the increase in loans with the need to avoid another episode of the bad-debt accumulation that prompted a decade-long bailout of banks.
"We want to share at least 10 percent of the nation's lending target," he said during the legislature's annual meeting. "But we won't loosen the lending standards. We just can't go back to the old path or receive any more government bailout."
New lending last month exceeded 800 billion yuan, more than triple the amount extended a year ago, said Liu Mingkang, chairman of the China Banking Regulatory Commission.
Xiao told Bloomberg News that the bank had no plans to raise its stake in Bank of East Asia Ltd or bid for any assets belonging to United States insurer American International Group Inc.
He also said shareholder Temasek Holdings Pte, Singapore's US$130-billion state-owned investment company, had agreed not to sell its stake in the Bank of China until at least June 30. Temasek owns 10.48 billion Hong Kong-listed shares, or 4.1 percent, in the lender.
The Bank of China is planning to add about 10,000 new employees this year, Xiao said, bucking the global financial meltdown that has cost more than 280,000 jobs worldwide so far. The new hires will mainly be college graduates, he said. The Bank of China had 237,379 employees at the end of 2007.
The bank also said yesterday that its largest shareholder, Central Huijin Investment, had proposed to sell up to 120 billion yuan (US$17.55 billion) in subordinated bonds to raise capital. The bond issue, which would be the largest yet among Chinese banks, would be sold to the end of 2012. Maturities would be at least 5 years.
Premier Wen Jiabao this week set a new loan growth target of 5 trillion yuan for this year as he prods banks to help support a 4-trillion-yuan stimulus package. Collapsing exports have dragged the world's third-largest economy to its weakest growth in seven years and cost the jobs of about 20 million migrant workers.
Domestic lenders offered a record 1.62 trillion yuan in new advances in January, more than double the previous all-time high set a year earlier, according to central bank data. The Bank of China Chairman Xiao Gang yesterday said the company needed to balance the increase in loans with the need to avoid another episode of the bad-debt accumulation that prompted a decade-long bailout of banks.
"We want to share at least 10 percent of the nation's lending target," he said during the legislature's annual meeting. "But we won't loosen the lending standards. We just can't go back to the old path or receive any more government bailout."
New lending last month exceeded 800 billion yuan, more than triple the amount extended a year ago, said Liu Mingkang, chairman of the China Banking Regulatory Commission.
Xiao told Bloomberg News that the bank had no plans to raise its stake in Bank of East Asia Ltd or bid for any assets belonging to United States insurer American International Group Inc.
He also said shareholder Temasek Holdings Pte, Singapore's US$130-billion state-owned investment company, had agreed not to sell its stake in the Bank of China until at least June 30. Temasek owns 10.48 billion Hong Kong-listed shares, or 4.1 percent, in the lender.
The Bank of China is planning to add about 10,000 new employees this year, Xiao said, bucking the global financial meltdown that has cost more than 280,000 jobs worldwide so far. The new hires will mainly be college graduates, he said. The Bank of China had 237,379 employees at the end of 2007.
The bank also said yesterday that its largest shareholder, Central Huijin Investment, had proposed to sell up to 120 billion yuan (US$17.55 billion) in subordinated bonds to raise capital. The bond issue, which would be the largest yet among Chinese banks, would be sold to the end of 2012. Maturities would be at least 5 years.
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