"AIG" Anger Spreads to China: Government Orders Bankers" Pay Cut
Now China's Ministry of Finance (MoF), also with an acute ear cocked towards public opinion, has decided to head off similar troubles, ordering a 10% at least cut in compensation for senior executives of state-owned financial firms. The cuts will be in pretax income, including basic compensation, incentives, social insurance, and various benefits.
Bank Lending Binge Continues, But for How Long?
After new bank lending reached over one trillion yuan in both January and February, March also saw more than one trillion yuan in new credit flow out the bank doors. The big banks are still running for the big projects involved in the government's economic stimulus plan, but a big part of funds lent for bill financing is continuing to flow into the stock market. And a large percentage of the financing is long-term and is boosting banks' NPL risk.
Big Banks' NPL Rates Rise with Big Boost in Lending
Despite the global economic jam, four of China's big state-owned banks, the Bank of China (BoC), Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Bank of Communications (Bocom), have all recently reported stunning performance. But the news is not all so pretty, as non-performing loan (NPL) ratios of three of the four banks are also climbing.
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