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China asking Shanghai lenders if tighter rules impacting credit quality -sources
June 14, 2017 / 5:52 AM / 5 months ago

China asking Shanghai lenders if tighter rules impacting credit quality -sources

SHANGHAI, June 14 (Reuters) - The Shanghai branch of China’s central bank is asking city lenders for information on asset quality, credit needs and potential risks on top of what all Chinese banks are preparing for a routine assessment, two people with direct knowledge of the matter said on Wednesday.

Banks in Shanghai recently received a notice from the People’s Bank of China (PBOC) asking them to provide the current size and industry distribution of their loan portfolio and report on how new loans in 2017’s first half compared to a year earlier, the two people said.

The Shanghai office of the PBOC also requested information on any impact the increased regulatory scrutiny has had on new loans, off-balance-sheet assets and the movement of assets from off-balance-sheet to on-balance-sheet, they added.

The PBOC was not immediately available for comment.

The notice was sent at a time Chinese banks have been preparing for the quarterly Macroprudential Assessments (MPA) that the central bank conducts for all lenders.

China’s banks have come under tougher regulatory scrutiny since the beginning of this year after the banking regulator released a slew of requests for self-inspections on matters ranging from credit risk to compliance.

According to the people knowledgeable about the PBOC Shanghai notice, it asked banks there whether bond issues have had an impact on credit needs and whether enterprises having difficulties issuing bonds have pivoted to borrowing, the people said.

In addition, the PBOC wants to know about the impact policy changes have had on loans to developers and mortgages, the people added. (Reporting by Li Zheng and Engen Tham in Shanghai; Editing by Richard Borsuk)

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