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Overseas banks in China urged to lend more

By Bi Xiaoning (chinadaily.com.cn)
Updated: 2009-02-20 20:38

A leading banking regulator has called on overseas banks in China to do more to support the country's development amid the current economic difficulties.

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Yan Qingmin, director of the Shanghai branch of the China Banking Regulatory Commission, urged overseas banks to "increase their contribution to the economy in the current tough times", and "lend more to small firms and agriculture-related projects".

Overseas banks cut local-currency advances in Shanghai by 1.78 billion yuan ($263 million) in January, even as local lenders extended a record 95 billion yuan in new loans, according to the city's central bank branch. A year earlier, foreign banks boosted lending by 12.3 billion yuan.

The after-tax profits of overseas banks in Shanghai increased 230.95 percent to 9.02 billion yuan at the end of last year, accounting for 75.76 percent of the total profits of overseas lenders in China, the watchdog said.

The Chinese mainland has proven profitable for overseas banks. For instance, although Bank of East Asia's net profits dropped 99.1 percent year-on-year, its net profit on the mainland was expected to increase about 20 percent.

"It's reasonable for overseas banks to take on more responsibilities while they benefit from China's economic development," said Everbright Securities analyst Jin Lin.

"Citi China remains committed to supporting the banking requirements of our clients throughout 2009 and beyond," Bloomberg quoted Stephen Thomas, a Shanghai-based spokesman for Citigroup, as saying.