China Warehouse- More Than Crockery Message Board

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Strategies & Market Trends : China Warehouse- More Than Crockery

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To: RealMuLan who wrote (1956)	12/13/2003 11:18:58 AM
From: RealMuLan	Read Replies (1) of 6370

Big China banks need 1t yuan to cut NPLs: Fitch CHINA needs at least one trillion yuan (S$205 billion) to help the country's largest state-owned banks reduce bad loans and prepare them for domestic share sales, according to Fitch Ratings. The amount, a 10th of China's gross domestic product last year, is the minimum needed to allow the banks to meet a government requirement they reduce non-performing loans to 15 per cent of total lending before they can sell shares publicly on the mainland, said Arthur Lau, a director at Fitch. 'This does not include city commercial banks and credit cooperatives,' Mr Lau said. 'The costs are potentially much bigger.' Fitch forecasts the bailout could cost as much as 30 per cent of China's GDP. Chinese Premier Wen Jiabao said on Wednesday that the government will inject more money into its four largest banks within six months to help cut bad loans it estimates are more than a fifth of total lending. The cost of the bailout could be about US$250 billion and it will probably be done in phases, US investment bank, Merrill Lynch & Co has forecast. Industrial & Commercial Bank of China, the nation's biggest lender, and its three closest rivals control about US$1.7 trillion of assets and account for 70 per cent of all loans. The bailout will cut NPLs estimated by the government at US$500 billion. business-times.asia1.com.sg

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