Chinese Banks With Massive 300 Billion Yuan Capital Shortfall

 

A massive lending binge over the past couple of years has left major Chinese banks undercapitalized according to a new report from Caing, which has gone through the latest financial reports.
Sure, profits are surging, but the bottom line is that these banks are likely to need 200-300 billion yuan (up to $45 billion est.) in 2010 in fresh capital. To put that into perspective, that's half as much as all the money raised by mainlaind Chinese public companies last year.
Specifically:

Industrial Bank's capital adequacy ratio slipped to 10.63 percent at the end of the first quarter of this year from 10.75 percent at the end of 2009, with its core capital level dimming from 7.91 percent to 7.59 percent. The minimum capital requirement for joint-stock banks was raised to 10 percent by China Banking Regulatory Commission late last year. For six largest banks, it is 11 percent.

China Citic Bank's capital adequacy dropped to 9.34 percent at the end of March, down 0.8 percentage point from the end of last year. The Bank of Ningbao had mixed performance: its core capital level dip from 9.58 percent at the end of last year to 9.07 percent at the end of the first quarter while capital adequacy ratio climbed from 10.75 percent to 10.88 percent during the time frame. 

J. Weisenthal

Commercial Chinese Banks Short of Capital

After a lending binge in 2009, many commercial Chinese banks now face capital shortages

(Beijing) - First quarter reports by five joint-stock banks, the second rung of China's bank industry ladder after the five biggest state-owned banks, have revealed that behind the rapid growth in net profits, capital adequacy ratios have fallen. Some banks have dipped below the regulatory capital requirement.    

On April 28, China Citic Bank, China Merchants Bank, the Bank of Ningbo, Industrial Bank and Shenzhen Development Bank filed their first quarter report to the Shanghai Stock Exchange.
China Merchants Bank, the country's sixth largest lender, reaped 5.91 billion yuan in net profit, ranking the first among the five joint-stock banks. China Citic Bank posted 4.08 billion yuan, coming second. Industrial Bank registered 4.079 billion yuan, the third, followed by Shenzhen Development Bank with 1.58 billion yuan in net profit and the Bank of Ningbo with 498 million yuan.
In terms of net profit growth rate, China Merchants Bank, Shenzhen Development Bank and the Bank of Ningbao registered over 40 percent quarterly growth compared with the same period in 2009. Industrial Bank's net profit grew 38.68 percent compared with a year earlier while China Citic had the slowest growth pace of 26.5 percent.  

Industrial Bank's capital adequacy ratio slipped to 10.63 percent at the end of the first quarter of this year from 10.75 percent at the end of 2009, with its core capital level dimming from 7.91 percent to 7.59 percent. The minimum capital requirement for joint-stock banks was raised to 10 percent by China Banking Regulatory Commission late last year. For six largest banks, it is 11 percent.
China Citic Bank's capital adequacy dropped to 9.34 percent at the end of March, down 0.8 percentage point from the end of last year. The Bank of Ningbao had mixed performance: its core capital level dip from 9.58 percent at the end of last year to 9.07 percent at the end of the first quarter while capital adequacy ratio climbed from 10.75 percent to 10.88 percent during the time frame.
Shenzhen Development Bank fared worst among the five. Its capital adequacy ratio fell to 8.66 percent at the end of the first quarter from 8.88 percent at the end of last year as its core capital dropped to 5.46 percent at the end of the first quarter from 5.52 percent at the end of last year.

The only bank with relatively abundant capital was China Merchants Bank, which saw its capital adequacy ratio rise from 1.08 percent to 11.53 percent in the past three months. In March, China Merchants Bank, the country's sixth-largest bank, raised 22 billion yuan to consolidate its capital base in a rights issue in Shanghai and Hong Kong.

Banking analysts estimated that China's listed banks will have to shore up capital by raising about 200 billion to 300 billion yuan in 2010. The figure was equal to the nearly half of the money raised in the mainland stock markets last year.

4月28日晚，中信银行股份有限公司（601998.SH/00998.HK，下称中信银行）发布2009年年 报和2010年一季度业绩报告。
中信银行2009年录得净利137.42亿元，同比增长3.21%。2010年一季度因净利息收入和手续费收入增加，录得净利40.84亿元， 增幅达26.5%。

2009年资产总额增幅41%，年底达到1.67万亿。2009年上半年信贷快速投放和10月收购中信国金后并表的影响下，中信银行资本充足率 和核心资本充足率均大幅下降，2009年底分别为10.14%和9.17%。

2010年一季度末，资本充足率继续下跌至9.34%，已低于监管要求，核心资本充足率为8.31%。年报同时显示，2009年年底，中信银行 存贷比为79.62%，已高于监管机构75%标准。中信银行表示，年初发布的次级债发行计划能使资本充足率达到监管要求，同时3年内的股本融资计划正在进 行。

2009年实现利息净收入342.2亿元。其中，生息资产规模增长对利息净收入的正面贡献为80.6亿元，部分弥补了去年净息差下降的影响。 2010年净息差和生息资产齐升，利息净收入102.07亿元，同比增长41.2%，手续费收入增幅达42%。

年报显示，2009年净息差5月触底后回升，全年平均净息差为2.58%，12月份净息差升至2.65%。2010年继续回升，3月净息差达到 2.76%。2009年净利差为2.39%，比上年下降0.55个百分点。

中信银行表示，去年对地方融资平台投资较为审慎，政府融资平台投放占贷款总量的15%。对于近期房贷新政，中信银行表示，对90平米以上首套房 贷款利率提高到正常利率的0.8倍，二套，三套房分别提高到1.1倍和1.2倍以上。

中信银行2009年上半年信贷投放迅猛，截至2009年末，中信银行集团贷款总额达10656.49亿元人民币，同比增长45.90%。

资产质量方面，2009年末拨备覆盖率达到162.28%，提升13.25个百分点，不良贷款余额和不良贷款率实现“双降”，其中不良贷款率达 到0.90%。2010年3月末，资产质量继续双降，不良贷款余额85.03亿元，不良贷款率为0.80%，拨备覆盖率达到185.01%。■