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Chinese regulator asks banks to stop hiding profits in excess provisions

THE WIRE WITH UP-TO-THE-MINUTE UPDATES

Chinese regulator is asking commercial banks to stop "hiding" profits in excess provisions for bad debts and distribute the profits to shareholders, part of the its efforts to curb accounting malpractice.

Banks with provisions exceeding 300 per cent of their nonperforming-loan balances would be seen as having “a tendency to hide their profits” and would need to distribute reserves beyond that amount as dividends, according to draft rules released Thursday by the Ministry of Finance.

Currently banks are required . . .

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