Smaller commercial banks such as China Minsheng Bank Co., China Merchants Bank Co. and Industrial Bank Co. are covered by a 50-basis-point cut in the reserve requirement announced recently by the central bank.
The so-called targeted reduction in the reserve requirement ratio (RRR), a form of mini stimulus, is being widened to include such lenders, Sina.com reported Monday, citing China International Capital Corp. Ltd. (CICC).
Minsheng and Industrial Bank are expected to release a combined 20 billion yuan to the financial system, the report said. The two have different loan exposure to the small enterprises and micro businesses.
They became eligible for the targeted RRR policy after the central bank adjusted its definition of small banks, the report said, citing CICC sources
Merchants Bank surprised the market by being categorized as a small lender. In the third quarter, it had 1.25 million yuan of related outstanding loans per account on average compared with 1.69 million yuan for Minsheng Bank.
However, Merchants Bank’s loans to small and micro businesses rose by 19.1 billion yuan and accounted for 80 percent of its new loans in the last quarter of 2013, making it the top small-loan lender, the report said.
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