Mizuho Corporate Bank (China), Ltd., a wholly-owned subsidiary of Japanese commercial lender Mizuho Corporate Bank, Ltd., has gained regulatory approval to expand registered capital by CNY 3 billion.
People in the know disclosed in an interview on October 16 that Mizuho Corporate Bank (China) had gained approval from the China Banking Regulatory Commission (CBRC), the top Chinese banking regulatory, to expand registered capital to CNY 9.5 billion from previously CNY 6.5 billion. The capital expansion would be completed by Mizuho Corporate Bank independently and upon the completion, it would rank No.3 among foreign banks in the Chinese mainland in terms of registered capital.
Foreign institutions have continued selling shares of state-owned Chinese commercial lenders since 2011 and capital markets at both home and abroad do not think highly of the Chinese banking industry. Thus it has become a focal point why the Japanese lender made such a decision at this time.
Mizuho Corporate Bank (China) declined to make a comment on this. However, in line with industry observers, the choice of foreign banks was always quite different from that of the capital markets. And in recent three years, major foreign banks with a legal person status there expanded registered capital by CNY 21.1 billion in total. A top executive with a Shanghai-based foreign lender said that as a financial reform was further advanced in the market, foreign banks would meet less difficulties in operating there. And it thought highly of great potential of the market.
Mizuho Corporate Bank (China) was formally established on June 1, 2007 with a registered capital of CNY 6.5 billion. And except the headquarters in Shanghai, it has had 10 branches each spreading in Beijing, Shenzhen, Wuxi, Tianjin, Dalian, Qingdao, Guangzhou, Wuhan, Suzhou and Hefei as well as three subbranches including the Kunshan one and the Tianjin Heping one. It saw loan outstanding hit about CNY 37.48 billion as at the end of 2012, up one percent from a year ago. The deposit outstanding was about CNY 57.83 billion, down six percent from a year earlier. And driven by factors including sharply increased exchange gains, its aggregate operating revenue and the net profit each surged up by 43 percent and 81 percent year on year. The core capital adequacy ratio and the capital adequacy ratio each stood at 17.33 percent and 18.52 percent. The loan to deposit ratio was 64.81 percent and the provision coverage was 1.45 percent. It needs to raise the provision coverage to 2.5 percent at the end of 2016.
