Web Exclusive

Three banks approved to set up financial leasing companies

By Cai Muyuan (chinadaily.com.cn)
Updated: 2010-05-06 14:52

Agricultural Bank of China, Industrial and Commercial Bank of China, and China Everbright Bank have already been approved to set up financial leasing companies, the National Business Daily reported.

By the end of March this year, China's twelve domestic financial leasing companies had witnessed record growth, with a net profit of 2.5 billion yuan ($366.20), 12.8 times that of 2007, and their asset balance reaching 186.3 billion yuan, 9.3 times that of 2007, said Cai Esheng, vice chairman of the Chinese Banking Regulatory Commission (CBRC) in Tianjin Wednesday,

"The CBRC will spare no effort in supporting financial leasing companies," Cai said. He also revealed that no more than ten banks will be approved for setting up financial leasing companies this year, the newspaper said. That means seven banks can still expect to be approved.

According to statistics, the assets scale of the financial leasing industry rose 120 percent in 2009 from the previous year. By the end of March this year, the capital adequacy ratio reached 22.1 percent, and the bad assets rate decreased to 0.78 percent from 3.95 percent, indicating a growing ability in risk control.

"Recently, China's financial leasing industry has witnessed faster growth, and the scale is expanding, but the industry is not mature enough in comparison to that of other countries," Cai said.

The development of China's financial industry is relying mainly on bank credits. "The CBRC will create a favorable environment so that the financial leasing industry will speed up its development," said Cai.