FTZ Push Drives Offshore Yuan Loans

FTZ Push Drives Offshore Yuan Loans

Shanghai banks conducted offshore yuan lending of 66.1 billion yuan (US$10.2 billion) last year, a surge of 119 percent year on year, as they tapped financial reforms to transact more cross-border business, the city’s banking regulator said yesterday.

“The expansion of the offshore business paid off after the city pushed forward the pilot free trade zone and encouraged the building of an international innovation and technology center,” Liao Min, head of the China Banking Regulatory Commission Shanghai Office, told a media conference with other financial regulators in Shanghai.

Another piece of good news is that the banking sector’s non-performing loans and the bad-loan ratio fell, Liao said.

Shanghai’s banking sector posted a fall in the bad-loan ratio to 0.87 percent at the end of February, he said. The figure was lower than 0.91 percent at the end of December and an average ratio of 1.67 percent among lenders countrywide.

Assets under management by Shanghai banks totaled 12.98 trillion yuan at the end of 2015, almost two times the scale five years ago.

Liao said the major task during the 13th Five-Year (2016-2020) Plan is to ensure sufficient liquidity in the real economy as well as managing systemic and regional risks.

“Shanghai’s banking regulator will tighten risk management and strengthen precautions on fundraising, bill financing and commercial property services,” Liao said.
He also said no bank employees in Shanghai were involved in illegal fundraising last year.

“We plan to establish a risk prevention system with securities and insurance regulators to crack down on any violation in the industry,” Liao said.

“That would help to prevent risks transferring from one sector to another.”
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