[ET Net News Agency, 7 March 2018] HSBC Global Research cited media reporting that the
China Banking Regulatory Commission (CBRC) is to announce new policies document no. 7 to
lower both the minimum NPL coverage ratio (from 150% to a range of 120-150%), and loan
loss provisions as a percentage of total loans requirement (from 2.5% to a range of
1.5-2.5%).
Were such a new policy to be confirmed and implemented, this would be a positive
surprise to the market, and the banking sector overall, said the research house.
Banks with higher existing NPL ratios and those with lower existing coverage could
benefit more, including CITIC (00998), ABC (01288), BoCom (03328) and Minsheng (01988).
That said, the extent of the benefit would also hinge on how CBRC would group and define
the minimum requirements for each group of banks, HSBC added. (KL)