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China tells foreign banks to lend more: regulator
Shanghai (AFP) Feb 19, 2009 China's banking regulator said Thursday it had told foreign banks operating in the country to do their bit to stimulate economic growth by lending more money. Foreign banks must "actively implement the nation's macro-tuning policies (and) boost their contribution to financial stability and economic growth," said Yan Qingmin, head of the China Banking Regulatory Commission's Shanghai branch. In a meeting on Wednesday, Yan told executives of foreign banks to adjust their credit policies and lending plans to give more support to economic growth, according to a statement from the regulator's Shanghai branch. He specified that foreign banks should increase lending to the rural sector and small and medium-sized enterprises, in line with the government's plan to boost the economy. "Foreign banks should report more information to their headquarters about the Chinese government's efforts to boost the economy and help their parents better understand the Chinese market," Yan was quoted as saying. Beijing has been encouraging banks to lend more to fuel economic growth, with the increased liquidity aimed at coinciding with the first impacts of a four-trillion-yuan government stimulus plan announced in November last year. New yuan loans in January jumped 21 percent from a year earlier to a record 1.6 trillion yuan (234.1 billion dollars). No figures have been released on how much foreign banks lent in January. But they apparently lagged behind in heeding Beijing's calls to lend more at the end of last year, according to data in the statement. Outstanding loans in locally incorporated foreign banks in Shanghai totalled 445.3 billion yuan at the end of 2008, up 9.3 percent from a year earlier, the statement said. The growth rate was only around half the 17.95-percent rise in total outstanding loans across all banks in China at the end of last year. The combined after-tax profits of Shanghai-based foreign banks grew to 9.0 billion yuan in 2008, more than three quarters of the total after-tax profit reported by all foreign banks in China, according to the statement. Share This Article With Planet Earth
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