Scattered throughout Wednesday’s third-quarter numbers from Bank of China and Agricultural Bank of China, the first of the country’s big lenders to report, are homilies about “promoting [the bank’s] healthy development” and “managing risks and sharpening competitiveness”. This isn’t just the standard cant. The age of irresponsibility is over.
Last year’s splurge of new lending across the banking system – up 32 per cent from 2008 – was deemed necessary to safeguard the nation’s recovery. Job done: asset growth over the past nine months has been more moderate at 15 per cent for BoC and 14 per cent for AgBank. That is consistent with expectations of new loan targets for 2011, likely to be set about Rmb7,000bn, to deliver growth of 14 to 15 per cent.
Further, the maximum 75 per cent loan-to-deposit ratio, relaxed during the crisis, is now more rigorously enforced by the regulator (BoC squeaks in at 74.7 per cent).
Finally, capital concerns are front and centre. As BoC disclosed an above average core capital ratio of 9.4 per cent, Citic (below average) received approval from the regulator to issue shares in Shanghai and/or Hong Kong. Last week, BoC and China Construction Bank (also above average) got the green light to raise as much as Rmb135bn between them.
Restraint is overdue. Seven successive years of rising profits, culminating in last year’s extraordinary surge, have given banks outsize returns. At AgBank, for example, return on equity in the first three quarters was 23 per cent – far above the 16 per cent average for companies in the broader CSI 300, suggesting bank returns had grown too high relative to the economy. Last year, regulators turned a blind eye to margins as bankers were garlanded as model workers. Now it is back to the humdrum business of serving the productive economy.
去年，整个银行业体系大举放贷 —— 新增贷款比2008年增长32% —— 被视为确保中国经济复苏的必要之举。任务已经完成：过去9个月，资产增长速度缓和了许多，中行和农行分别为15%和14%。这符合人们对2011年新增贷款目标的预期——可能定为7万亿元人民币左右，增长率介于14%-15%之间。