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Business / Companies

BOC remains global important financial institution

By Wang Xiaotian (chinadaily.com.cn) Updated: 2012-11-07 15:31

Bank of China Ltd, the fourth biggest commercial lender in China by market value, was selected again as a global systemically important financial institution by the 20 Group executive body of the Financial Stability Board.

The board had cut the number of such globally important institutions from last year's 29 to 28, according to a new list released by the board on Nov 1.

Banks that made the list will be required to increase capital by 2016, which worried analysts and investors who were already concerned after the bank reported weaker results earlier this year compared with its domestic State-owned counterparts.

The global systemically important financial institutions "are required to meet higher supervisory expectations for risk management functions, data aggregation capabilities, risk governance and internal controls", said the board.

According to the new list, the bank is still the only commercial lender from an emerging market to have joined the "too big to fail" club. In early November of last year, it was included in the club for the first time.

By the end of September, the capital adequacy ratio of Bank of China stood at 13.15 percent, while the core capital adequacy ratio registered at 10.38 percent. Its net profit rose by 10.4 percent year-on-year in the first nine months to 106.4 billion yuan.

The China Banking Regulatory Commission has required a core capital adequacy ratio of 10 percent for major banks so the new limit will have no immediate effect.

The London-based Standard Chartered Bank and Spain's BBVA were added to the new list, while three banks were removed?- Belgium's Dexia, as it undergoes an orderly resolution process, Germany's Commerzbank and Britain's Lloyds, as result of a decline in their global systemic importance.

Institutions on the lists are expected to increase their core capital adequacy ratio by another 1 to 2.5 percentage points compared with the general requirement of 7 percent set by the Basel Committee on Banking Supervision.

wangxiaotian@chinadaily.com.cn

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