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Listing standards may rise
By Feng Jianmin |
December 14, 2011, Wednesday
|
Print Edition
Print Edition
CHINA'S securities regulator is said to be looking into higher standards to limit the number of regional banks from listing but the market has criticized an "unreasonable" rule based on the size of assets in deciding whether to approve the listing.
Around 10 regional banks, or city commercial banks, which have gained the green light from the China Banking Regulatory Commission to go public are having difficulties to get approval from the China Securities Regulatory Commission, the 21st Century Business Herald reported yesterday.
The CSRC has been reluctant to approve all the applications and is considering higher standards for approval because it is worried that a wave of initial public offerings of banks may further hurt sentiment in the sluggish stock market, the newspaper said.
"A convincing standard should be developed whether to approve it (listing) or not," the paper quoted an unidentified CSRC official.
The paper cited market rumors that the CSRC will only allow banks with assets over 100 billion yuan to be listed, a proposal criticized by bankers and regulators as "unreasonable." Only a handful of banks wanting to list can meet the requirements, the paper said.
"It will drive city commercial banks to expand their reach and asset scale, and that is against the intent of bank regulation and supervision," one local bank regulator was quoted as saying.
Instead the city commercial banks suggested the CSRC should consider profitability, quality of services, and banks' competitiveness in a certain area to gauge their suitability to list.
"But they must meet regulations, such as the credit risk of local government financial vehicles and the banks' risk tolerance level," Sheng Changqing, chief macro-economic analyst with China Everbright Bank, reiterated.
Around 10 regional banks, or city commercial banks, which have gained the green light from the China Banking Regulatory Commission to go public are having difficulties to get approval from the China Securities Regulatory Commission, the 21st Century Business Herald reported yesterday.
The CSRC has been reluctant to approve all the applications and is considering higher standards for approval because it is worried that a wave of initial public offerings of banks may further hurt sentiment in the sluggish stock market, the newspaper said.
"A convincing standard should be developed whether to approve it (listing) or not," the paper quoted an unidentified CSRC official.
The paper cited market rumors that the CSRC will only allow banks with assets over 100 billion yuan to be listed, a proposal criticized by bankers and regulators as "unreasonable." Only a handful of banks wanting to list can meet the requirements, the paper said.
"It will drive city commercial banks to expand their reach and asset scale, and that is against the intent of bank regulation and supervision," one local bank regulator was quoted as saying.
Instead the city commercial banks suggested the CSRC should consider profitability, quality of services, and banks' competitiveness in a certain area to gauge their suitability to list.
"But they must meet regulations, such as the credit risk of local government financial vehicles and the banks' risk tolerance level," Sheng Changqing, chief macro-economic analyst with China Everbright Bank, reiterated.
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