China Construction to tighten grip on overseas operations

US$1bln exposure to Dubai World prompted lender to strictly control its bonds and loan investments abroad.

China Construction Bank, the country's second-largest lender, would strictly control its overseas operation risks and diversify assets in the future after its US$1 billion exposure to Dubai World debt, according to a senior executive.

Fan Yifei, CCB vice president, said last Friday that the bank would give priority to developing overseas business closely related to domestic operations while gradually putting risk management of overseas branches under a uniform risk control system.

Fan said the bank would strictly control its overseas branches' bond and loan investments to reduce non-preforming loans.

The lender will focus on funding domestic enterprises to operate overseas and facilitating trade exchanges, he added.

CCB disclosed on March 28 that it had set aside provision for around US$1 billion of loans granted by its Hong Kong branch to Dubai World.

When the Dubai firm announced a debt restructuring last November, the loans granted by the CCB's Hong Kong branch were categorized as non-performing.

View the full story in Shanghai Daily.

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