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China:
Will the Reforms be in Time?
Snapshot: 22 banks in the 500 (1999: 22) Assets: $1,516.1b.
($1,351.4b.) Profits: $2.5b. ($2.7b.)
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China
is beginning to reform its lumbering banks. None too soon. The system
has been overloaded with state-ordered spending to hopeless state
enterprises. Now that WTO entry is all but a formality, competition
from healthy foreign banks is on the horizon; reform can no longer
be delayed.
RESTRUCTURING Dozens of smaller institutions have already been
closed. After the not-so-small matters of bad loans and recapitalization
have been handled, expect bigger banks to consolidate.
RECAPITALIZATION Four asset management companies are gradually
taking away NPLs from the books of the four largest state banks and
are now starting to sell off the collateral. Total cost of recapitalizing
the Chinese banking system is estimated to be over $90 billion (slightly
less than what Indonesia will probably spend).
REGULATION Reforms have given the central bank teeth and bank
supervision has vastly improved though it still lags behind global
or even regional standards.
Performance
Topnotchers: 10 Best Performing Banks
|
Institution |
Assets
$
Mill |
Profits
$
Mill |
Profit
as
% of |
500
Rank
|
Assets |
Equity |
1 |
INDL.
& COML. BANK OF CHINA |
Beijing |
427,546 |
498.3 |
0.1% |
2.3% |
7 |
2 |
BANK
OF CHINA |
Beijing |
350,736 |
534.3 |
0.2% |
3.0% |
9 |
3 |
CHINA
CONSTRUCTION BANK |
Beijing |
265,845
|
598.8 |
0.2% |
4.6% |
11 |
4 |
AGRICULTURAL
BANK OF CHINA |
Beijing |
244,270
|
-110.3 |
|
|
13 |
5 |
BANK
OF COMMUNICATIONS |
Shanghai |
64,986
|
223.0 |
0.3% |
6.9% |
30 |
6 |
CHINA
EVERBRIGHT BANK |
Beijing |
20,278
|
81.8 |
0.4% |
7.3% |
105 |
7 |
CHINA
MERCHANTS BANK |
Shenzhen |
19,866
|
117.7 |
0.6% |
8.2% |
107 |
8 |
CITIC
INDUSTRIAL BANK |
Beijing |
19,003
|
91.8 |
0.5% |
9.5% |
115 |
9 |
GUANGDONG
DEVELOPMENT BANK |
Guangzhou |
14,723
|
21.9 |
0.1% |
4.2% |
144 |
10 |
SHANGHAI
PUDONG DEVT. BANK |
Shanghai |
12,466
|
111.8 |
0.9% |
11.9% |
155 |
Write to Asiaweek at mail@web.asiaweek.com
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Rating
show the number of banks in each category; "E" is the lowest
grade for financial soundness.
Souce: Moody's Investors Service
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