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December 17, 2009

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Chinese banks' CAR stands at 11.4%

CHINESE banks reported their capital adequacy ratio stood at 11.4 percent at the end of the third quarter, well above the international safety standard of 8 percent, which showed that the nation's banking industry was in good shape.

The banks' core assets CAR reached 9 percent, said a report posted on the Website of the China Banking Regulatory Commission yesterday.

Despite the improved CAR, bank credit was excessively concentrated in certain sectors, which was the most prominent risks facing China's banking industry in the long run, said Wang Huaqing, a senior official of CBRC.

China's banks extended 9.4 trillion yuan (US$1.38 trillion) in the first three quarters, of which 61.6 percent were medium and long term loans.

"Banks pumped these loans mainly into infrastructure construction, property market and manufacturing," Wang said.

He said the country's banking regulator had always attached great importance to the prevention of concentration risks and strictly control the size of loans given to a particular customer.

He also estimated new loans would total 9.6 trillion yuan for the whole year.


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