IMF on China

BEIJING – China’s big four state banks are still far from operating healthily despite billions of dollars in government bailouts and changes to corporate governance structures, the International Monetary Fund has said.

The banks’ way of doing business appears to have changed little, with loans made failing to reflect their corporate borrowers’ level of risk, the IMF said in a working paper published Thursday. The other two big state banks are the Industrial and Commercial Bank of China and Agricultural Bank of China.The lending institutions, which China has been preparing for oncoming foreign competition, were supposed to clear their bad loans and move towards more rational lending.However, there is little indication the banks have shed their decades-long bad habit of lending to mostly state-owned companies that are often unprofitable, according to the report’s findings.- Nampa-AFPThe other two big state banks are the Industrial and Commercial Bank of China and Agricultural Bank of China.The lending institutions, which China has been preparing for oncoming foreign competition, were supposed to clear their bad loans and move towards more rational lending.However, there is little indication the banks have shed their decades-long bad habit of lending to mostly state-owned companies that are often unprofitable, according to the report’s findings.- Nampa-AFP