Dubai World's exposure sees stricter CCB
Source: Xinhua |
April 5, 2010, Monday
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Print Edition
Print Edition
CHINA Construction Bank, the country's second-largest lender, would strictly control its overseas operation risks and diversify assets in the future after its US$1 billion exposure to Dubai World debt, according to a senior executive.
Fan Yifei, CCB vice president, said last Friday that the bank would give priority to developing overseas business closely related to domestic operations while gradually putting risk management of overseas branches under a uniform risk control system.
Fan said the bank would strictly control its overseas branches' bond and loan investments to reduce non-preforming loans.
The lender will focus on funding domestic enterprises to operate overseas and facilitating trade exchanges, he added.
CCB disclosed on March 28 that it had set aside provision for around US$1 billion of loans granted by its Hong Kong branch to Dubai World.
When the Dubai firm announced a debt restructuring last November, the loans granted by the CCB's Hong Kong branch were categorized as non-performing.
Dubai said it would spend up to US$9.5 billion to restructure the debt-laden conglomerate in a plan that would pay back bank lenders in five to eight years.
The bank's NPL ratio dropped to 1.50 percent in 2009, down 0.71 percent from the end of the previous year. The lender raised its allowances to NPL ratio to 175.77 percent, or an increase of 44.19 percentage points from the previous year-end.
One of the largest commercial banks in China, CCB has opened 60 overseas operating outlets, including seven branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo, Seoul and New York.
Fan said CCB was now studying the feasibility of setting up branches in regional financial hubs and merging markets like Southeast Asia, the Middle East and Latin America.
CCB announced on March 28 that its net loans and advances to customers were 4.69 trillion yuan (US$687.11 billion), up 27.4 percent from the previous year-end, while its net profit rose 15.32 percent to 106.84 billion yuan.
(Xinhua)
Fan Yifei, CCB vice president, said last Friday that the bank would give priority to developing overseas business closely related to domestic operations while gradually putting risk management of overseas branches under a uniform risk control system.
Fan said the bank would strictly control its overseas branches' bond and loan investments to reduce non-preforming loans.
The lender will focus on funding domestic enterprises to operate overseas and facilitating trade exchanges, he added.
CCB disclosed on March 28 that it had set aside provision for around US$1 billion of loans granted by its Hong Kong branch to Dubai World.
When the Dubai firm announced a debt restructuring last November, the loans granted by the CCB's Hong Kong branch were categorized as non-performing.
Dubai said it would spend up to US$9.5 billion to restructure the debt-laden conglomerate in a plan that would pay back bank lenders in five to eight years.
The bank's NPL ratio dropped to 1.50 percent in 2009, down 0.71 percent from the end of the previous year. The lender raised its allowances to NPL ratio to 175.77 percent, or an increase of 44.19 percentage points from the previous year-end.
One of the largest commercial banks in China, CCB has opened 60 overseas operating outlets, including seven branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo, Seoul and New York.
Fan said CCB was now studying the feasibility of setting up branches in regional financial hubs and merging markets like Southeast Asia, the Middle East and Latin America.
CCB announced on March 28 that its net loans and advances to customers were 4.69 trillion yuan (US$687.11 billion), up 27.4 percent from the previous year-end, while its net profit rose 15.32 percent to 106.84 billion yuan.
(Xinhua)
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