Chinese banks' capital adequacy improves in Q4

China's banking regulator announced that the country's commercial banks had improved their capital adequacy at the end of last year.

According to Xinhua News Agency, data released by the China Banking Regulatory Commission showed the average capital adequacy ratio of Chinese commercial banks stood at 12.2 percent by the end of the fourth quarter last year, 0.6 percentage points higher than the previous quarter.

The figure was also 0.8 percentage points higher than the beginning of last year.

The CBRC data showed the core capital adequacy ratio of Chinese banks stood at 10.1 percent at the end of the fourth quarter, 0.6 percentage points higher than the third quarter, and up 0.9 percentage points from the start of the year.


The CBRC attributed the improved adequacy to the financing activities conducted by 14 of the 16 listed Chinese banks last year, which raised a record 340 billion yuan, following excessive lending since 2009 and higher reserve requirement ratios set by the central bank.

The People's Bank of China, or the central bank, has hiked bank reserve requirement ratios seven times since the start of last year to soak up liquidity and curb inflation.

China's major banks have to set aside a record 19 percent of their reserve and small and medium-sized banks must keep 15.5 percent of their deposits as reserves.