China Construction bank to reduce lending and focus on "managing risk"

Discussion in 'Wall St. News' started by ASusilovic, Aug 7, 2009.

  1. China Construction Bank (SH. 601939; HK. 1939) said it will strengthen risk controls in the second half to avoid a rise in bad loans, focusing particularly on financing extended to projects under the government's 4 trillion yuan stimulus package.

    The bank disbursed 708.5 billion yuan worth of new loans in the first six months as the government loosened monetary policy to prop up the economy. On raw totals alone, CCB was the most conservative of the four biggest commercial banks, which were led by Bank of China (SH.601988; HK.1988) with new loans of 901.9 billion. Agricultural Bank of China lent 858.9 billion during the period while Industrial and Commercial Bank of China (SH.601398; HK.1398) lent 825.5 billion.

    "The bank will focus on reducing the risk attached to offering credit to companies engaged in projects under the government's economic stimulus plan in the second half, as well as strengthening post-lending oversight for industrial loans," CCB said in a statement on its Web site on July 28.

    "The bank will attempt to prevent any decline in loan quality that may be caused by excessive credit growth," it added.