Capital gap forming between China banks and Basel requirements
There are concerns over the capitalisation gap growing between China's largest banks and their Basel requirements, as the 2018 deadline looms.&nbsp;Agricultural Bank of China is considered by analysts to be the most at risk with its core capital adequacy far behind the other big Chinese lenders, coupled with its 1.83% non-performing loan ratio, an industry high. Views differ on how much regulatory capital banks should hold at present, however, given the buildup of bad debt in China, a bailout could require more capital than most assume says Mizuho analyst, Jim Antos. Furthermore, it appears that mid-sized lenders are ignoring the capital-lending exercise altogether.
As a globally systemically important bank, Agricultural Bank of China's core capital adequacy was far behind its Chinese peers at the end of June. Photo: Bloomberg