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China – Bank Announces New Infrastructure Loans.

27 January, 2015

 

Legal News & Analysis – Asia Pacific – China – Banking & Finance

 

China Development Bank (CDB) has unveiled a lending plan for at least 590 billion renminbi (CNY) (USD 96bn) in new loans to be made available for infrastructure projects in 2015.

 

CDB, a wholly state-owned policy bank, said at least CNY 400bn (USD 64bn) of the new loans will be used to support housing renovation projects in shanty towns in urban areas, the state-run Xinhua News Agency reported.

 

Around CNY 100bn (USD 16bn) will be available to the railway sector, with another CNY 90bn (USD 14.5bn) going to key water infrastructure projects, the bank said.

 

According to Xinhua, the lending plans follow on from CNY 408.6bn (USD 65.6) of loans granted by the bank in 2014 “to support shanty town renovation projects”. “In the same year, the bank’s new lending to railways and water projects reached CNY 119.5bn and CNY 81.4bn (USD 19bn and USD 13bn) respectively,” Xinhua said.

 

On 22 January, the bank reported net profits for 2014 of CNY 88.4bn (USD 14bn). Total assets topped CNY 10 trillion (USD 1.6tn) and the non-performing loan ratio stood at 0.63%.

 

China approved infrastructure projects worth a combined total of more than USD 100bn between October and November last year, according to figures from the country’s National Development and Reform Commission.

 

Xinhua said the projects included 16 railways and five airports to help boost sluggish annual growth, which Xinhua said slowed to 7.3% in the third quarter of 2014 and was “the weakest since the height of the global financial crisis”

 

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For further information, please contact:

 

Michael Isaacs, Partner, Pinsent Masons

michael.isaacs@pinsentmasons.com

 

John Salmon, Partner, Pinsent Masons

john.salmon@pinsentmasons.com

 

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