ZCZC
BCN-21
CHINA-BANK-INSURER-FINANCING
China instructs banks, insurers to up financing support for real economy
BEIJING, Aug. 12, 2018 (BSS/Xinhua) – The China Banking and Insurance
Regulatory Commission (CBIRC) said Saturday that it has encouraged banks and
insurance companies to increase funding to meet the financing demand of the
real economy.
Preliminary data showed that newly made yuan loans in July stood at 1.45
trillion yuan (212 billion U.S. dollars), up 623.7 billion yuan from the same
period last year, the commission said in a statement on its website.
“[The commission] instructed banking and insurance institutions to have an
accurate understanding of the relations between promoting economic growth and
containing risks,” the statement said.
It also urged the institutions to make full use of current favorable
conditions including abundant liquidity and declining financing costs to
raise their financing support for the real economy.
Banks have been instructed to ensure financing demand of projects under
construction and raise funding support for weak areas in the country’s
infrastructure, the statement read.
Among the new yuan loans in July, lending to the infrastructure sector
rose from June to 172.4 billion yuan.
The commission has also encouraged banks to write off their bad loans to
create more room for increasing lending.
In the first half, commercial banks wrote off bad loans of about 800
billion yuan, up 166.5 billion yuan from the same period last year.
The CBIRC has supervised banks to retain more profits to consolidate their
core capital, and supported banks to replenish their capital base through
multiple channels, the statement said.
The statement added that efforts were also made to improve the incentive
mechanism to make banking institutions more willing to serve the real
economy, including increasing the tolerance for bad loans to small- and
micro-sized enterprises.
In the first seven months of this year, bank lending to small and micro
firms rose 1.6 trillion yuan, faster than the increase in overall bank loans
during the period.
In the future, the commission will continue to uphold the underlying
principle of pursuing progress while ensuring stability and further raise the
quality and efficiency for financial institutions to serve the real economy,
the statement said.
BSS/AFP/HR/1210