Central govt to inject 20bln yuan into Everbright Bank

Chinanews, Shanghai, Oct. 18 - Related regulatory body from the central government has recently decided¹ to allocate² 20 billion yuan from the Central Huijin Investment Co. to solve the financial problem of the Everbright Bank. The plan has been handed over to the State Council for approval, the Dongfang Daily reported.

The money will help the Everbright Bank to move a step closer to its restructuring. Specifically, it will be used to attract overseas investors³ and for the bank's initial public offering (IPO).

The Everbright Bank did not disclose its latest capital adequacy ratio. Insiders estimate that its current capital adequacy ratio is about 2%. According to the requirement of the China Banking⁴ Regulatory Commission (CBRC), by the end of this year, all domestic banks should keep their capital adequacy rate at least at 8%.

Insiders say that the saving scheme for the Everbright Bank is still being discussed, and the Central Huijin Investment Co. will provide all the money needed. However, the major obstacles to the scheme was cleared in early September when the Ministry⁵ of Finance, CBRC and the central bank submitted the proposed scheme to the State Council.