China’s four biggest banks are among lenders who have been set differentiated reserve requirement ratios, said Liu Mingkang (劉明康), chairman of the China Banking Regulatory Commission (CBRC).
Liu didn’t specify whether all four banks or only some were targeted, nor by what margin they were ordered to raise ratios. The regulator spoke to reporters while attending the closing session of the National People’s Congress in Beijing yesterday.
Liu didn’t say when the differentiated reserve requirement ratios were imposed or whether they are still in place.
Central bank officials, including Governor Zhou Xiaochuan (周小川), have said that they will use differentiated ratios in addition to the universal reserve requirement to curb lending. Under the system, individual lenders are told to hold differing amounts as reserves according to capital adequacy levels and lending growth.
The nation’s biggest four banks are Industrial & Commercial Bank of China Ltd (ICBC, 中國工商銀行), China Construction Bank Corp (中國建設銀行), Bank of China Ltd (中國工商銀行) and Agricultural Bank of China Ltd (中國農民銀行).
TARGETED BANKS
The People’s Bank of China has imposed differentiated reserve requirement ratios on 40 banks since January, Xinhua news agency -reported last month, citing an unnamed spokesman at the central bank. China has increased the overall reserve requirement for banks twice this year and raised interest rates once in a bid to curb inflation.
RAMPANT GROWTH
The 40 lenders targeted were local lenders, which had lower capital adequacy ratios and “rampant” growth in lending, Xinhua said, citing the spokesman. China’s central bank hasn’t publicly disclosed which banks were targeted and by how much their reserve requirements were raised.
Bank of China hasn’t been selected for the differentiated requirement, bank president Li Lihui (李禮輝) said in Beijing on March 5.
Liu also said yesterday that outstanding loans to the financing vehicles of local governments are now “under control” and that the banking regulator will closely monitor the situation.
The central bank has raised banks’ reserve requirement ratio eight times since the beginning of last year, excluding any extra requirements for individual lenders not publicly announced. The ratio now stands at 19.5 percent for the biggest banks.
Chinese banks extended 535.6 billion yuan (US$81.5 billion) of -local-currency loans last month, the central bank said yesterday. That was less than the 600 billion yuan median estimate in a Bloomberg News survey of 19 economists.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
RSS