China News Service, July 11th, according to the website of the China Insurance Regulatory Commission on the 11th, a spokesperson for the China Insurance Regulatory Commission said in response to a reporter's question that it is currently necessary to strengthen supervision of capital flows, regulate cross-market capital transactions and business cooperation, and prohibit bank insurance institutions from participating in violation of regulations. Off-site allocation, strict investigation of leveraged and speculative speculation, to prevent the creation of asset bubbles, and to ensure that financial resources really flow to the real economy in the most needed areas and links.
The following is the full text of the question and answer:
Question one: Since the beginning of this year, the economic downturn has been superimposed on the impact of the epidemic situation, and the operating environment of the banking and insurance industry has undergone profound changes. All sectors of society have also paid close attention to it. Please briefly introduce the current operation of the banking and insurance industry.
A: Under the strong leadership of the Party Central Committee with Comrade Xi Jinping at the core, we have on one hand supported epidemic prevention and control and economic and social development, on the one hand, on preventing and mitigating financial risks, and deepening financial reform and opening up, effectively responding to the rapid changes and complex situation since the beginning of the year. Problems and challenges. At present, the overall operation of my country's banking and insurance industry is sound, the risks are controllable, and the ability to serve the real economy is constantly improving. However, we must also see that the potential risks will remain relatively large in the coming period, and we must remain sober, calmly judge, and plan ahead.
As of the end of June, the total domestic assets of my country's banking industry were 301.5 trillion yuan, a year-on-year increase of 9.8%. In the first half of the year, RMB loans increased by 12.09 trillion yuan, an increase of 2.42 trillion yuan year-on-year. At the end of June, the balance of non-performing loans was 3.6 trillion yuan, an increase of 400.4 billion yuan from the beginning of the year. The non-performing loan ratio was 2.10%, an increase of 0.08 percentage points from the beginning of the year. The provision coverage ratio was 178.1%, a decrease of 4 percentage points from the beginning of the year. The total insurance assets were 21.7 trillion yuan, an increase of 5.7% over the beginning of the year. The comprehensive solvency adequacy ratio of insurance companies was 244.6%, and the core solvency adequacy ratio was 233.6%, which remained at a relatively high level. In the first half of the year, premium income was 2.7 trillion yuan, a year-on-year increase of 6.4%. The main operating and regulatory indicators of bank insurance institutions are within a reasonable range.
At present, the outstanding risks and challenges are as follows. First, the pressure of rising non-performing assets has increased. Although the balance of non-performing loans has not increased significantly since the beginning of this year, due to the economic downturn reflecting a time lag in the financial sector, coupled with the short-term hedging effect of macro policies, the risk of default has been temporarily delayed, and it is expected that non-performing loans will appear in the next period. And rise. Second, some small and medium-sized financial institutions have more serious problems. Some banks, insurance or trust companies have large shareholder manipulation and insider control, corporate governance mechanisms have failed, asset and liability foundations are already relatively fragile, asset quality has accelerated and deteriorated under the impact of the epidemic, and risks continue to accumulate. Third, some market chaos has rebounded. Some high-risk shadow banks have revived, and some have attempted to make a comeback with new forms and new features. The leverage ratio of enterprises, households and other sectors rose. Some funds flowed into the stock market in violation of the rules, pushing up the asset bubble. Fourth, violations of laws and regulations occur from time to time. For example, the Wuhan Golden Phoenix fake gold incident, which has been gradually revealed since January 2020, involves many banks, insurance and trust institutions. In addition to the reasons of the enterprise itself, it also reveals that the internal control and risk management of some financial institutions are ineffective and need to be caused. highly valued.
According to the new situation and new situation, the Banking and Insurance Regulatory Commission will continue to maintain its strength, optimize regulatory measures, deal with violations of laws and regulations according to law, effectively improve the ability to prevent and resolve financial risks, continue to deepen financial reform and opening up, and promote the quality and efficiency of serving the real economy. Ensure the stable operation of the banking insurance industry and achieve high-quality development.
Question 2: Affected by the impact of the epidemic, the real economy encountered certain difficulties, and the risk of financial asset deterioration increased. What kind of judgment will the Banking and Insurance Regulatory Commission make on the current non-performing asset situation and future trends, and what measures will be taken to prevent and resolve it?
A: Affected by factors such as the new coronary pneumonia epidemic, the credit risk of the banking insurance industry has increased. As of the end of June, the balance of non-performing loans and non-performing loan ratios reported by various institutions have generally increased from the beginning of the year. The Banking and Insurance Regulatory Commission has been paying close attention to changes in non-performing assets, and has carefully analyzed and responded with an objective and professional spirit. At present, the domestic economic operation has marginally improved, but it has not returned to normal levels. The overseas epidemic situation has not been effectively controlled, and the world economy is facing a deep recession. Some industries and enterprises that are heavily affected by the epidemic have huge operating pressures, and their repayment ability has declined. Although we have adopted hedging policy measures such as temporarily postponing principal and interest payment, borrowing new and returning old loans, renewal, and modifying loan contracts, the problems inherent in poorly managed companies have not been fundamentally resolved, and there is still a greater risk of default in the future. Some banks, enterprises, and local governments are unwilling to actively expose the bad, and some even deliberately whitewash and conceal. In general, the current non-performing loans have not been fully exposed, and there is considerable upward pressure.
We must be prepared to respond to a possible rebound in non-performing loans. First, we must further solidify asset classification. Strictly distinguish between the enterprises that are in difficulty due to the epidemic and those with higher operating risks. For the latter, the asset classification is strictly determined according to the regulations. Those that meet the bad standards must be classified as bad. Other on- and off-balance sheet assets that actually bear credit risk should also be implemented. Classification criteria. Second, we must continue to increase disposal efforts. This year, the amount of disposal of non-performing assets should be increased reasonably on the basis of last year, and the resources released by lowering the provision coverage rate must be used for disposal of non-performing assets. Third, we must broaden the channels for disposal of non-performing assets. Comprehensive use of verification, clearance, bulk transfers, debt-to-equity swaps, etc., to ensure that the verification should be done, and should be done everywhere. Pilot carry out batch disposal of non-performing assets, and gradually promote after summing up experience.
Question 3: Recently, the financial management department has launched a series of new measures in terms of bank replenishment of capital and dynamic adjustment of provisions. How do you view the current capital and provisions of the banking industry, and what policy measures will be taken in the future?
A: The China Banking Regulatory Commission has carefully implemented the decision-making and deployment of the Party Central Committee and the State Council, and issued a series of policy measures to guide banking financial institutions to rationally arrange operating elements such as provisions and capital to enhance their ability to serve the real economy and resist risks. In terms of provisions, the principle of prudence is strictly followed. It is required to accurately distinguish the causes of risks, fully reflect the risk base, and make sufficient provision in time according to regulations. Adhere to the combination of internal and external sources to supplement capital. Encourage banks to increase the retention of profits and ensure the accumulation of capital. Support banks to issue common stocks, preferred stocks, unfixed-term capital bonds, tier 2 capital bonds and other capital instruments. For a few institutions that are difficult to replenish capital through market-oriented channels, actively promote the financing of government funds in accordance with laws and regulations. Implement the latest policy of the provincial government to issue special bonds to supplement the capital of small and medium banks as soon as possible, and organically combine supplementary capital and optimized corporate governance.
At present, the overall capital and provisions of the banking industry are relatively sufficient, but the distribution is uneven. Some institutions, especially some small and medium-sized institutions, have low capital and provision levels, unrealistic funds, limited capital replenishment capacity, and few channels. The Banking and Insurance Regulatory Commission will further urge the banking financial institutions to increase the provision and increase the capital strength to achieve a stable operation. One of the current priorities is to cooperate with the provincial government to formulate an implementation plan to issue special bonds to supplement bank capital, and improve the ability of small and medium-sized banks to resist risks and provide credit by strengthening capital.
Question 4: In the first quarter of this year, China’s GDP grew by -6.8% year-on-year, but bank profits achieved a positive growth of 6%. How does the China Banking Regulatory Commission view this situation and what policy considerations will it have?
Answer: While the growth rate of the real economy has fallen sharply, the profits of the banking industry have maintained a certain increase for a variety of reasons, but the most important thing is the time lag caused by the current financial accounting and statistical system. According to the accrual basis accounting principle, the potential risk loan interest income is still fully included in the profit calculation, and the actual risk has not yet been fully reflected. Secondly, profit growth is largely the result of a substantial increase in interest-earning assets. In order to vigorously support the prevention and control of epidemics and the resumption of business and production, the interest-bearing assets of the banking industry, especially credit, increased substantially year-on-year. In the first half of the year, interest-earning assets of banking financial institutions increased by 17 trillion yuan, and RMB loans increased by 12.09 trillion yuan. The substantial increase in scale brought about a corresponding increase in book interest and profits. Third, some institutions fail to meet the standards. Even if the current minimum standard of 100% provision coverage is calculated, there is still a gap of more than 350 billion yuan in banking institutions. If they are evenly distributed to cover the provision gap throughout the year, the profit growth rate of these institutions will be greatly reduced, and some will even be negative.
The Banking and Insurance Regulatory Commission will urge the banks to maintain reasonable growth of profits in accordance with the decisions of the Party Central Committee and the State Council, and make real profits and make good use of profits. First, we must make greater efforts to benefit the real economy. We will do everything possible to reduce the comprehensive financing costs of enterprises, especially small and micro enterprises, and promote the financial system to benefit the real economy by 1.5 trillion yuan throughout the year. Second, it is necessary to fill the provision gap in a timely manner and comprehensively cover risk losses. Banks that fail to meet the standard should formulate plans to meet the standard as soon as possible. Under the current special situation, each bank should assess the potential risk according to the customer’s true risk level and the expected credit loss method, and make provisions accordingly. Third, we must effectively replenish capital. Appropriately reduce dividends, not increase bonuses, use limited profits more for capital replenishment, and improve risk resistance.
Question 5: The current resumption of production and production is proceeding in an orderly manner. What measures and actions have been taken by the China Banking Regulatory Commission in respect of the "six stability" work and the implementation of the "six security" tasks, and how to further promote the banking industry to provide better services The real economy?
A: The Banking and Insurance Regulatory Commission resolutely implements the decision-making and deployment of the Party Central Committee and the State Council, starting with the total amount and structure at the same time, instructing banking and insurance institutions to do a solid job of "six stability" and "six guarantees" financial services, and promoting a virtuous cycle of economic and financial affairs. First, strengthen financial support for the real economy. In the first half of the year, RMB loans increased by 12.09 trillion yuan, an increase of 2.42 trillion yuan year-on-year. The bond investment of bank and insurance institutions and equity investment of insurance funds maintained rapid growth. The insurance industry’s compensation and payment expenses exceeded 520 billion yuan. The second is to strengthen financial services in the field of epidemic prevention and control. Actively meet the reasonable financing needs of health and epidemic prevention and scientific research, and provide differentiated financial services for regions, industries, and enterprises that are greatly affected by the epidemic situation. At the end of June, the balance of loans in the health and social work industry increased by 21.5% year-on-year, and the payment of health insurance claims increased by 11% year-on-year. The third is to do a good job in financial support to stabilize enterprises and guarantee employment. Implement the policy of deferred principal and interest payment for loans of small and medium-sized enterprises, and extend the principal and interest of more than 1.8 trillion loans through extension and renewal of loans. Promote the improvement of the due diligence exemption and fault-tolerance and correction mechanism of private enterprise loans, and improve the availability of financing for private enterprises. Fourth, increase financial support in weak areas. The "Measures for the Supervision and Evaluation of Financial Services for Small and Micro Enterprises in Commercial Banks" was issued, and the financial services for small and micro enterprises "increase, expand, improve quality, and reduce costs." Recent statistics show that the balance of inclusive small and micro-enterprise loans has exceeded 13 trillion yuan, a year-on-year growth rate of 27.6%, and an average interest rate of 6.03%, which is 0.67 percentage points lower than last year's average interest rate. Fifth, actively serve key areas and major projects. Guided funds were invested in key areas such as manufacturing and infrastructure. The balance of loans at the end of June increased by 1.7 trillion yuan and 2.2 trillion yuan respectively from the beginning of the year. The strength of foreign trade financial services continued to increase. In the first half of the year, China Export & Credit Corporation supported export underwriting of US$269.9 billion.
The Banking and Insurance Regulatory Commission will continue to do a good job of coordinating the promotion of epidemic prevention and control and economic and social recovery and development, and implement the implementation of policies. One is to open up and restore the economic cycle. Continue to consolidate the momentum of economic recovery and development, study and implement "low-cost unsecured" emergency loans for small and medium-sized enterprises and emergency financing arrangements for large and medium-sized enterprises to better play the role of policy financial countercyclical adjustment. The second is to enhance the stamina of economic development. Increase credit support for key industries and inclusive small and micro enterprises, and actively expand final consumer demand. The third is to better play the insurance protection function. Optimize and perfect insurance products, especially disaster insurance, public health insurance, health insurance, etc., accelerate the speed of claims, improve the efficiency of claims, so that enterprises can get insurance compensation in time and resume work as soon as possible. The fourth is to continuously improve the synergy of macro policies. Strengthen the coordination of various policies in finance, finance, employment, industry, etc. to achieve mutual support of multiple levels of policies to better serve various market players. The fifth is to urge and guide the funds to "get rid of virtual reality." In-depth development of market chaos will be carried out to "look back", and severely crack down on capital emptying and illegal arbitrage according to law. At present, it is particularly necessary to strengthen the supervision of capital flow, regulate cross-market capital transactions and business cooperation, prohibit bancassurance institutions from participating illegally in off-site allocation, strictly investigate the behavior of leverage and speculation, prevent the creation of asset bubbles, and ensure that financial resources truly flow to the real economy. The areas and links most needed in China.