China’s banking regulator expects domestic lenders to raise as much as US$73 billion from capital markets next year in a bid to boost their financial strength, the Financial Times reported. Li Fuan, acting director general of one of the China Banking Regulatory Commission’s departments, expects US$44-58 billion to be raised through equity or bond issues and a further US$15-29 billion to come from Agricultural Bank of China’s initial public offering. Domestic banks extended US$1.35 trillion in new loans during the first 11 months of 2009, nearly three times the annual average lending total in recent years, as part of efforts to stimulate the economy. Beijing is believed to have set a lending target of around US$1 trillion for 2010. There is some concern about the reemergence of non-performing loans and this has led to banks being instructed to increase their capital adequacy levels.
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