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Banks urged to turn to syndicated loans

BANKS in Shanghai must prioritize syndicated loans worth more than 1 billion yuan (US$146 million) to cut risk concentration, the local regulator said today.

"Banks are required to pro-actively turn to syndicated loans to key investment projects for bettering Shanghai's economic structure," the Shanghai Bureau of the China Banking Regulatory Commission said today.

Authorities have asked banks to offer syndicated loans if a single client's total credit need is more than 15 percent of the bank's capital or if a single project is worth more than 10 percent of the bank's capital.

This can help propel growth by trimming risks and funding projects in transport, energy, chemicals, electronics and real estate.

Last year, 79 syndicated loan deals were signed in shanghai with a contract value of 90.48 billion yuan. This was 20 more loans than those signed in 2008.

The outstanding value of syndicated loans in Shanghai totaled 67.14 billion yuan by the end of 2009, a rise of 13.15 billion yuan since 2008.


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