Pri­vate firms get more sup­port

Com­mer­cial lenders re­it­er­ate com­mit­ment to in­crease fi­nanc­ing for the sec­tor

China Daily (Hong Kong) - - BUSINESS - By JIANG XUEQING jiangx­ue­qing@ chi­nadaily.com.cn

Top fi­nan­cial in­sti­tu­tions have re­sponded proac­tively to Pres­i­dent Xi Jin­ping’s call for more steps to ad­dress the fi­nanc­ing woes of pri­vate firms and re­it­er­ated their com­mit­ment and sup­port for the same.

State-owned lender Bank of China Ltd was one of the first off the block af­ter it un­veiled a slew of mea­sures on Fri­day to sup­port pri­vate en­ter­prises with the aim of sta­bi­liz­ing China’s for­eign trade and do­mes­tic in­vest­ment.

The coun­try’s fourth largest com­mer­cial lender by as­sets an­nounced 20 mea­sures in­clud­ing op­ti­miz­ing its credit grant­ing pol­icy, re­duc­ing the cost of ser­vice, ex­pand­ing the scope of col­lat­eral, and of­fer­ing non-col­lat­eral loans to high-qual­ity pri­vate firms based on their credit record.

Bank of China will also im­prove per­for­mance eval­u­a­tions so that its loan of­fi­cers will not be held re­spon­si­ble for de­faults on loans to small busi­nesses if they have done the due dili­gence, said Pan Yue­han, chief risk of­fi­cer at BOC.

The bank’s lat­est move came two days af­ter China’s top bank­ing and in­sur­ance reg­u­la­tor an­nounced three new tar­gets for banks re­gard­ing of­fer­ing loans to pri­vate firms.

“Ac­cord­ing to pre­lim­i­nary con­sid­er­a­tions of the reg­u­la­tor, banks should achieve three tar­gets: For large banks, their loans to pri­vate firms should ac­count for no less than one third of their new cor­po­rate loans. For small and medium-sized banks, the pro­por­tion should be no less than two thirds. Bank­ing in­sti­tu­tions al­to­gether should try to at­tain the goal of grant­ing no less than 50 per­cent of their to­tal new cor­po­rate loans to pri­vate firms in three years,” said Guo Shuqing, chair­man of the China Bank­ing and In­sur­ance Reg­u­la­tory Com­mis­sion, in an in­ter­view with the Bei­jing-based Fi­nan­cial News on Wed­nes­day.

Since the be­gin­ning of this year, fi­nan­cial reg­u­la­tors have con­tin­u­ously stepped up ef­forts to sta­bi­lize fi­nanc­ing chan­nels, mar­ket con­fi­dence and ex­pec­ta­tions. At the end of Septem­ber, loans of­fered by bank­ing in­sti­tu­tions to pri­vate en­ter­prises ac­counted for nearly one fourth of to­tal loans, said Guo.

Wang Jian­feng, chair­man of Joyson Hold­ing Co, a Ning­bobased pri­vate firm com­mit­ted to the re­search, de­vel­op­ment and man­u­fac­tur­ing of au­to­mo­tive com­po­nents and au­to­mo­tive elec­tron­ics, said he hopes that banks will at least keep their size of lend­ing to pri­vate com­pa­nies at the cur­rent level.

“I also hope that large Sta­te­owned com­mer­cial banks will ex­plore ways to fur­ther sup­port com­pa­nies, which are com­pet­i­tive and con­cen­trate on their main busi­ness, for join­ing global com­pe­ti­tion,” said Wang.

More than 100 pri­vate firms across China in­clud­ing Joyson Hold­ing signed agree­ments of co­op­er­a­tion with BOC on Fri­day.

The Peo­ple’s Bank of China, the cen­tral bank, also said it will use mon­e­tary pol­icy to in­cen­tivize fi­nan­cial in­sti­tu­tions to in­crease sup­port for pri­vate com­pa­nies. At a sym­po­sium jointly held by the PBOC and fi­nan­cial reg­u­la­tors in Bei­jing on Fri­day, 10 banks and se­cu­rity firms pro­posed an ini­tia­tive to sup­port the fi­nanc­ing of pri­vate com­pa­nies through mul­ti­ple chan­nels.

PRO­VIDED TO CHINA DAILY

A vis­i­tor walks past a booth of Bank of China at the Bei­jing In­ter­na­tional Fi­nance Expo on Nov 1.

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