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PBOC: China banks not profiteering

03-13-2012 08:35 BJT Special Report:2012 NPC & CPPCC Sessions |

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Central bank governor Zhou Xiaochuan said China's banking industry saw considerable profits last year, but the word "profiteering" crosses the line.

Zhou Xiaochuan, governor of the People’s Bank of China defended the country’s banking industry, saying it’s not profiteering. Rather, he says, the industry could face capital shortfalls this year.

Zhou said: "The banking system may face capital shortage problems in 2012."

Zhou says the banking industry did see better profit margins compared with other industries in 2011. But he says more analysis is needed to find out why.

Zhou said: "During the Asian Financial Crisis, the banking industry suffered huge losses, which weren’t covered for many years. Indeed, the gap between deposit and loan rate has been narrowed since then. Therefore, further analysis is necessary to find out what led to high profits in the industry."

At the press conference, PBOC deputy governor Liu Shiyu said the central bank encourages commercial banks to offer discounted interest rates for mortgages on first homes.

Liu said: "The central bank has set a lower limit for interest rates on first home mortgages, and the benchmark interest rate is at the upper limit. Within that range, financial institutions are encouraged to offer discounts to first home buyers."

In addition, the central bank will support the construction of government-subsidized housing and prevent potential risks in the property market.

 

Editor:Zhang Rui |Source: CNTV.CN

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