A senior official with the mainland’s banking regulator said that Chinese banks have stepped up lending to finance domestic mergers this year, but risks will prevent these businesses from surging, Reuters reported. Cai Esheng, vice-chairman of the China Banking Regulatory Commission, told a forum on Tuesday that Chinese banks have extended US$1.9 billion in loans to finance domestic mergers this year and US$400 million for cross-border deals as of the end of May. Another US$2.8 billion for domestic mergers and US$440 million for overseas acquisitions are currently in the pipeline. But Chinese banks remain inexperienced in pricing and risk control and should not expect high growth from these loans. “As for such a risky business, banks, regulators and the entire mergers and acquisitions market for that matter should not expect explosive growth,” he said.
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