CBIRC announced that the banking and insurance sectors in China continue to be healthy and to maintain a good momentum. Risks in key areas are effectively prevented and controlled, with capital adequacy ratios for commercial banks and insurance companies remaining adequate. The non-performing loan ratio of the banking sector was generally stable, along with the liquidity of commercial banks.
The proportion of liquidity, liquidity coverage, and net stable funds reached 55.8%, 140.2% and 122.1%, respectively. The main liquidity indicators of small and medium-size banks generally met the regulatory requirements. Risk resilience remains stable. At the end of July, the provision coverage ratio of commercial banks was 188.1%, an increase of 10.3 percentage points over the same period of the previous year. With more innovative tools to supplement capital through multiple channels, commercial banks have issued more than CNY 700 billion of non-fixed-term bonds and second-class capital bonds this year, further strengthening their capital and consolidating their risk resistance. At present, the capital adequacy ratio of commercial banks has reached 14.12%, an increase of 0.58 percentage points over the same period of the previous year. The insurance companies' comprehensive solvency adequacy ratio was 245.3% and the core solvency adequacy ratio was 233.4%, both of which remained within a reasonable range.
Related Link (in Chinese): News Release
Keywords: Asia Pacific, China, Banking, Insurance, NPLs, Capital Adequacy, Liquidity Risk, NSFR, Basel, CBIRC
Previous ArticleBCRA Updates Rules on Capital Requirements and Information Regime
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.