ANALYSIS-With woes at home, China banks scour globe to lend
Reuters, 08.03.03, 11:05 PM ET
forbes.com
By Tony Munroe
HONG KONG, Aug 4 (Reuters) - When Australia's Qantas Airways Ltd needed US$240 million to finance the purchase of two Boeing 747 aircraft earlier this year, China Construction Bank was quick to oblige.
Overseas loans by Chinese state banks would have raised eyebrows in international lending circles a year ago, but they're rapidly becoming business as usual. China's "Big Four" state banks are elbowing their way into syndicated overseas deals to offset mountains of bad debt at home.
"What they're trying to do is to improve their balance sheets by putting on loans which are of higher credit quality," said John Corrin, managing director and head of Asia-Pacific loan syndication at Credit Lyonnais in Hong Kong. "Clearly, that means lending internationally."
So far this year China's Big Four have participated in primary syndicated loans outside of China and Hong Kong worth US$103.2 billion, compared with just $61.8 billion for all of 2001 and $32.56 billion in 2000, according to data from Basis Point, a Reuters company.
The banks' actual exposure is much lower, as those totals include funds committed by other banks.
"Over the last year-and-a half, we see them increasingly active," said Anton Martin, global head of distribution at bank Standard Chartered Plc in Hong Kong.
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