Economy
Bank of China to sell up to $5.8B in bonds
(Agencies)
Updated: 2010-01-24 13:56
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BEIJING: Bank of China plans to sell up to 40 billion yuan ($5.8 billion) in bonds to replenish its capital and meet government standards following a record surge in lending last year amid Beijing's stimulus measures, a state-run news agency reported.
Regulators have warned some banks that they have fallen below minimum capital requirements after handing out some 9.5 trillion yuan in loans last year. Banks are expected to scale back lending to roughly 7.5 trillion yuan in 2010.
Bank of China's proposal still requires shareholder approval at a meeting in March, the Xinhua News Agency said in its report late Saturday.
China's banking industry is regarded as the healthiest of any major economy because institutions avoided the mortgage-related turmoil that battered Western lenders.
Beijing hopes cooling the pace of lending will keep its economy growing without creating inflation and overheating. Other nations are counting on that growth and a healthy demand from China for their goods for their own recoveries.
Record bank lending in 2009 to support government spending on infrastructure and other projects under Beijing's stimulus package has led to fears of asset bubbles and huge bank losses if too many loans sour.
