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The Industrial and Commercial Bank of China agreed to extend a credit line of 10 billion yuan (US$1.21 billion) to Jinjiang International Holdings Co Ltd over the weekend. The nation's largest hotel management firm is hungry for capital to speed up its expansion across the country.
"With sufficient financial support, we are confident of achieving the goal of being listed among the world's top 30, or even 20, hoteliers in five years," said Yu Minliang, chairman of Jinjiang International Holdings Co Ltd, on Saturday.
To achieve the target, the company plans to double the number of its hotels to 200 nationwide, at a cost of about 3 billion yuan.
Jiang Jianqing, president of the ICBC, said that extending credit lines to large companies, instead of small firms, will help ward off potential risks of overdue loans.
Meanwhile, the China Banking Regulatory Commission said that it will soon release rules on providing credit lines to companies by the nation's lenders.
The banking industry regulator said in a statement that the rules will encourage lenders to strengthen risk control on credit lines and set up internal credit information systems.
"Corporate clients have different credit worthiness and excessive credit lending has already put many banks in a dilemma," said the CBRC.
Chinese lenders, especially the big four banks, are urged by the central government to reduce their huge non-performing loans.
Currently, the NPL ratio in the big banks is estimated at more than 20 percent due to years of policy of lending to ailing state-owned enterprises in the 1990s.
(Shanghai Daily September 1, 2003)
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