[Note: regulators should allow banks to scale to write off bad loans, in order to reduce the pressure to dispose of bad assets of banks. Only increase, not decrease, in order to reduce the loss of state-owned assets disposal of bad assets. This approach will make no exception, bring about the same pressure on banks that do not have this trouble. ]

Source: Wall Street in

This week,CITIC Bank Stock Exchange in Hongkong said in statement submitted,CITIC Bank plan to the shareholders for write off bad loans 5200000000 yuan, far exceeding the previous plans "verification of 2000000000 yuan of bad loans".Write off amount as high as 5200000000 yuan, very rare.

China CITIC Bank is the size of the industry China bank assets ranked seventh nationwide joint-stock commercial bank.CITIC Bank said, affected by the decline in China economy, the amount of bad loans in the surge, write off a huge amount of non-performing loans is necessary.As of 2013 10 at the end of the month, the balance of bad loans of CITIC Bank than at the beginning of the year rose 43%, reaching 16990000000 yuan. To write off bad loans to help banks to dispose of bad loans, improve the quality of assets. In addition, the verification will reduce bank to pay taxes and fees, improve the bank profit.

Although China slowing economic growth, excess capacity in steel, textile and other industries, the level of non-performing loans China banks remain at around 1%. As of 9 at the end of 2013, the non-performing loans of CITIC Bank rate is only 0.9%.The non-performing loan rate low, raises questions for many investors, that the bank through the loan or restructuring loans, conceal some bad loans.

Barclays analyst May Yan said, as of the end of 6, China banking new bad loans than the beginning of the year rose 35%. The credit quality of Jiangsu, Zhejiang and other export center variation.In recent years, Jiangsu and Zhejiang area in total loans, the sluggish growth in traditional industries, so bad loans increased.

China CITIC Bank is not the first to apply to write off bad loans, the bank to the shareholders. In 2011, Shanghai Pudong Development Bank, Minsheng Bank and put forward respectively for write off of 376000000 yuan and 147000000 yuan of non-performing loans to the shareholders, the amount and the CITIC Bank than.

　　According to informed sources, process verification loans is complex, subject to the approval of the Ministry of finance China. Normally, banks need to prove, they tried their best, failed to recover the loans, non-performing loans can be allowed to write off.

　　This year in November, Tianjin bank said, plans to write off more than 900000000 yuan of non-performing loans, the amount of more than 2012 by the end of the book value of Tianjin bank non-performing loans.

A few years ago, China CITIC bank profit growth was two digit. In 2012, China CITIC bank profit growth of only 0.7%, mainly by its 4000000000 yuan loan impairment losses. According to regulatory requirements, the total provision and the bank loan ratio of not less than 2.5%. As of the end of 9, CITIC Bank loan ratio is only 2.09%. In March this year, CITIC Bank President Zhu Xiaohuang said, China CITIC Bank will increase the provision level, in order to meet regulatory requirements. Increase the provision level, also means that will affect the profitability of China CITIC bank.

China bad loans in the banking sector in the surge. The first half of this year,The five major state-owned banks to write off bad loans, the total amount of 22100000000 yuan,Over the same period last year 7650000000 yuan of nearly three times.