Banking regulator warns of credit risks
By Ding Yining |
June 16, 2010, Wednesday
|
Print Edition
Print Edition
CHINA'S banking regulator yesterday warned of increasing credit risks in house mortgages and more pressure from non-performing loans.
"The risks associated with home mortgages are building and chain risks of real estate development loans may appear as property market uncertainties ratchet up," the China Banking Regulatory Commission said in its 2009 Annual Report, published on its Website yesterday.
Domestic banks extended 9.6 trillion yuan (US$1.4 trillion) of new loans in 2009, 32 percent more than the previous year, in an effort to combat the global financial crisis.
Property prices in 70 major cities rose for the 12th consecutive month in May, rising 12 percent from a year ago, according to the National Bureau of Statistics.
More required
In mid-April, the government raised the down-payment requirement on second-home mortgages to at least 50 percent from 40 percent, and later issued a notice saying banks should suspend loans to people buying a third or more home in efforts to cool the real estate market.
These new policies have spurred concern of lack of liquidity and the crackdown measures may hurt other industry sectors. The benchmark Shanghai Composite Index has lost 21 percent this year.
"As the macroeconomic environment changes and economic restructuring speeds up this year, the possibility of a rebound in credit loss and credit risks remains high as most of them are medium to long-term loans and are highly concentrated in several industry sectors," the banking industry watchdog said in the report.
"Credit risks associated with some medium- and low-end industries with heavy dependence on the international market and industries with excessive capacity may emerge soon when economic restructuring efforts intensify," the report noted.
Concerns remain
"We remain highly concerned of the negative effect brought by trade conflicts, debt crisis, high unemployment rates as well as over-capacity that may emerge in the post-crisis period," Liu Mingkang, CBRC president, said in the statement.
New loans in the first five months this year reached 4 trillion yuan, which represents more than 53 percent of the 7.5-trillion yuan whole-year target.
"Although trade volume is rising, the world economic recovery is still not stable and debt crisis as well as unemployment issues may add to the instability of the global economy," the report added.
The commission also pledged it will firmly carry out the differentiated credit policy to make sure loans meet effective needs as well as push forward to improve the credit structure.
"The risks associated with home mortgages are building and chain risks of real estate development loans may appear as property market uncertainties ratchet up," the China Banking Regulatory Commission said in its 2009 Annual Report, published on its Website yesterday.
Domestic banks extended 9.6 trillion yuan (US$1.4 trillion) of new loans in 2009, 32 percent more than the previous year, in an effort to combat the global financial crisis.
Property prices in 70 major cities rose for the 12th consecutive month in May, rising 12 percent from a year ago, according to the National Bureau of Statistics.
More required
In mid-April, the government raised the down-payment requirement on second-home mortgages to at least 50 percent from 40 percent, and later issued a notice saying banks should suspend loans to people buying a third or more home in efforts to cool the real estate market.
These new policies have spurred concern of lack of liquidity and the crackdown measures may hurt other industry sectors. The benchmark Shanghai Composite Index has lost 21 percent this year.
"As the macroeconomic environment changes and economic restructuring speeds up this year, the possibility of a rebound in credit loss and credit risks remains high as most of them are medium to long-term loans and are highly concentrated in several industry sectors," the banking industry watchdog said in the report.
"Credit risks associated with some medium- and low-end industries with heavy dependence on the international market and industries with excessive capacity may emerge soon when economic restructuring efforts intensify," the report noted.
Concerns remain
"We remain highly concerned of the negative effect brought by trade conflicts, debt crisis, high unemployment rates as well as over-capacity that may emerge in the post-crisis period," Liu Mingkang, CBRC president, said in the statement.
New loans in the first five months this year reached 4 trillion yuan, which represents more than 53 percent of the 7.5-trillion yuan whole-year target.
"Although trade volume is rising, the world economic recovery is still not stable and debt crisis as well as unemployment issues may add to the instability of the global economy," the report added.
The commission also pledged it will firmly carry out the differentiated credit policy to make sure loans meet effective needs as well as push forward to improve the credit structure.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
