Banking

Empty desks during a break at the Shanghai Stock Exchange. After the global economic downturn, mainland businesses were naturally cautious when asked about their listing plans.

BEIJING: Chinese companies are becoming more cautious about listing publicly in the light of the economic downturn, according to a recent report released by leading accounting firm Grant Thornton International.

Only 11 percent of businesses surveyed on the Chinese mainland in 2010 expect to undertake a public listing in the next three years, down from 20 percent of businesses in 2009 and 60 percent in 2008, it revealed.

The so-called Grant Thornton International Business report is an international survey of the opinions of medium to large businesses, in which more than 7,400 chief executive officers, managing directors, chairmen and other senior executives from 36 economies across all industry sectors were questioned. 300 businesses were surveyed on the Chinese mainland including 100 State-owned and public sector and 200 privately-owned companies.

China Development Bank (CDB), one of China's three policy banks, lent 261.3 billion yuan ($38 billion) to country's centrally-administered state-owned enterprises (SOEs) in 2009, up 47.8 percent year-on-year, CDB said in a statement Tuesday.

The loans mainly went to support pillar industries, such as electric power, railways and telecommunications, of the central SOEs, according to the statement issued to Xinhua.

Some state infrastructure building projects such as the Beijing-Shanghai high-speed railway and the South-North Water Diversion Project were key recipients of financial support.

New energies and a low carbon economy were also fields in which CDB rendered its support, with total outstanding loans reaching 5 billion yuan, the statement said.

Last year, the CDB lent a total of $25.7 billion to central SOEs for their overseas assets acquisitions.

CHINESE authorities' repeated moves to rein in bank lending in recent weeks highlight the addiction of the country's banks to loose credit, and efforts to wean them could lead to further turmoil in global financial markets.

The core of the problem: China's state-owned banks both want to make profits and need to follow government policy.

Those two demands are now in conflict as regulators shift gears to control credit expansion, creating uncertainty over the outlook for China — the world's fastest growing major economy — that has repeatedly jolted global markets.

People familiar with the situation said earlier this week that branches of Industrial & Commercial Bank of China, the country's biggest lender, and China Citic Bank had suspended new lending until February.

It isn't clear whether this followed a broad dictate from the central government.

While the sources said bank headquarters ordered the halt, regulators often convey instructions by privately telling senior bank officials.

The move followed word last week from a Bank of China official that it had stopped issuing new loans for the rest of January.

Shenzhen Development Bank estimates its net profits in 2009 may surge 700 percent year-on-year to 5 billion yuan ($732.40 million), or 1.6 yuan per share, it forecasts in a filing to the Shenzhen Stock Exchange.

The bank attributes the profit jump to the drop of provision coverage compared with the amount it prepared in 2008.

It expected a net interest income of 13 billion yuan in 2009, up about 3 percent from 2008. Its operating income in 2009 may rise 4 percent year-on-year to 15.1 billion yuan.

The bank said its net interest margin in 2009 may fall 0.55 percentage point to 2.47 percent. Its return on net assets that year may rise 22 percentage points to 26 percent.