3 Listed Banks See High Loan-to-Deposit Ratio
SZDVF | Quote | Chart | News | PowerRating -- The loan-to-deposit ratio of China CITIC Bank (601998.SH,0998.HK), Shenzhen Development Bank (000001.SZ) and China Minsheng Banking Corp. (Minsheng Bank, 600016.SH, 1988.HK) by far stood at 81%, 82.4%, and 78% respectively.
Currently, Chinese banking industry watchdog China Banking Regulatory Commission requires a maximum loan-to-deposit ratio of 75% for the country's commercial banks. Usually, commercial banks offer more loans with the bank deposits, so as to pursue more profits. However, this might cause pressure or even risks to the asset security of these lenders, once too many loans have been offered. In order to lower the loan-to-deposit ratio and meet the regulatory requirement, CITIC Bank, Shenzhen Development Bank and Minsheng Bank have to either take in more deposits or control the loan scale.
Chinese residents' deposits reduced CNY 250.7 billion this October. The banking industry researcher Guo Tianyong points out that the recovery of the stock market and the hot house sales in the second half year attracted more deposits. The World Bank earlier raised the expectation for China's economic growth up to 8.4% and 8.7% for 2009 and 2010 respectively.
By November 13, 2009, the number of stock investment accounts reached 137.9 million on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. As for the house market, the sales of secondhand houses reached 13,874 houses in the first 14 days of this month in Beijing, an increase of 97% compared to the first 14 days of October. During the one month from mid-October to mid-November, up to 27,000 secondhand houses were traded, which indicated the record high.
Also, with the capital adequacy ratio lowered by fast loan growths, more Chinese banks have the plan of refinancing. As of October 8, 2009, China Merchants Bank (600036.SH, 3968.HK), Shanghai Pudong Development Bank (SPD Bank, 600000.SH), Minsheng Bank and Shenzhen Development Bank disclosed their refinancing plans, with a combined amount of CNY 67 billion.
On November 26, 2009, Minsheng Bank is to make debut on the Hong Kong Stock Exchange. Minsheng Bank said in the listing prospectus that it is to sell not more than 3.819 billion H-shares at an indicative price range of HKD 8.5 to HKD 9.5 per share, thus to raise about HKD 35 billion, so that the core capital adequacy of the lender could be higher than 8%, to support its business expansion in the coming three years.
(USD 1 = CNY 6.82)
Source: www.cnstock.com (November 24, 2009)
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