Chinese banks should rely less on capital markets and more on non-lending income to fund their growth, said China Merchants Bank (CMB; 600036.SH, 3968.HK) President Ma Weihua, the Wall Street Journal reported. Ma criticized China’s banks for relying too heavily on stock offerings to fund a lending expansions. Ma suggested instead focusing more on commissions and service fees, which he hopes will rise to 30% of the bank’s business, up from 21% today. The five largest banks sold a combined US$65 billion of equity and convertible debt in 2010, amid a government-directed splurge in lending. CMB announced a further offering of US$5.5 billion, which is currently awaiting regulatory approval. However, the nation’s banks will have to shore up their balance sheets as they prepare to meet stricter capital requirements under the new Basel III regulatory regime. Wu Xiaoling, a former central bank deputy governor, said recently that large banks may need to raise up to US$78 billion over five years to met the new 11.5% capital requirement.