Jan 05 - CBRC to Define Systematically Important Banks Based on Four Indicators

Source: China Business News,ChinaScope Financial (Data)

+   Meanwhile, China’s business activity index for non-manufacturing industries was 56% in December, further supporting the positive sentiment.

+   China’s Banking Regulatory Commission will rank domestic banks based on four indicators; size, interconnectedness, substitutability (financial infrastructure), and complexity, each with a weight of 25%.

+   Banks will be grouped based on their rank. The five major state-owned banks, Industrial and Commercial Bank of China Ltd. (SSE: 601398; HKEX: 1398), Agricultural Bank of China Ltd. (SSE: 601288; HKEX: 1288), Bank of China Ltd (SSE: 601988; HKEX: 3988), China Construction Bank Co. (SSE: 601939; HKEX: 0939) and Bank of Communications Co., Ltd. (SSE: 601328; HKEX: 3328), are expected to  be categorized as systematically important banks and required to have a 1% loss absorbency in addition to the capital adequacy ratio, as stipulated by the Basel III. Currently, the capital adequacy ratio in these banks cannot be lower than 11.5%.

+   In terms of size, sub-indicators include asset balance, liability balance, gross income and market value.

+   In terms of interconnectedness, sub-indicators include intra-financial system assets, intra-financial system liabilities and wholesale funding ratio.

+   In terms of substitutability, sub-indicators include payment systems, and assets under custody.

+   In terms of complexity sub-indicators include overseas assets and business number of institutions, etc.

+       Related Companies: Industrial and Commercial Bank of China (SSE: 601398), Agricultural Bank of China (SSE: 601288), Bank of China (SSE: 601988), China Construction Bank (SSE: 601939), Bank of Communications (SSE:601328), China Merchants Bank (SSE: 600036)  ,China Minsheng Banking (SSE: 600016) ,China CITIC Bank (SSE: 601998)

+   Related Data: CAR, Operating Scale, Overseas Branches

Major Banks’ CAR

Comparison of Operating Scale (11Q3)

Comparison of Complexity (11Q2)

Trading Comparable

For more data on other banks, please visit www.chinascopefinancial.com

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