CBRC: better order in Chinese banks

The China Banking Regulatory Commission held its annual national banking supervision and management work conference from January 25 to 26, which reviewed the situation in past year and set tones for 2018.

Guo Shuqing, head of the top banking regulator, attended the meeting and made comments.

The meeting said the regulator has thoroughly rectified industry disorders by dealing with illegal financial institutions and unlawful financial practices and made great efforts to improve weak links of the regulatory system, aiming to prevent and resolve risks in the banking sector.

Positive changes have emerged after a year's efforts, the meeting said. Banks have been shifting from high-speed growth to high-quality development, as shown by a 12.6 percent growth in new loans versus a mere 8.7 percent increase of their total assets.

The banking industry have answered the central government’s call for better serving the real economy in past year, as interbank assets and liabilities of commercial lenders contracted for the first time since 2010, and interbank asset management business shrank by 3.4 trillion yuan (US$537.9 billion) compared with the beginning of 2017.

Total off-balance-sheet business saw a month-on-month fall, with banks’ wealth management business and investments through “special purpose vehicle" down by over 5 trillion yuan and around 10 trillion yuan respectively.

Meanwhile, compliance awareness has been strengthened among the sector, with more than 100 banks taking the initiative to shrink their balance sheets.

The meeting pointed out that risks are generally “controllable” in the whole industry, but warned that the situation is still “grave and complex” and requires regulatory authorities to “keep a clear mind”.

The conference stressed that preventing and resolving financial risk will remain a top priority and identified 10 specific areas for 2018, including reducing the debt ratio of enterprises, curbing the leverage ratio of residents and compressing interbank investment.

The banking industry should improve its service capacity through reform and opening up, according to the meeting.