CCB sets aside provision of some 30 pct bad debt
Provision of nearly 30% for bad debt from overseas investments in 2009 was set aside by China Construction Bank (CCB), including around USD 1 billion loan granted by its Hong Kong branch to the Dubai World.
CCB top executives on March 29, 2010 specified there was serious worsening of the quality of assets under operation of the lender's overseas institutions, mainly due to loan. A sum of nearly USD 1 billion in loan was granted by the Hong Kong branch to the Dubai World.
The main focus of the board meeting of the lender has been the loans. They tried to decrease loan from 2008; however when debt restructuring was declared by the Dubai World last November, the lender has to bring the loans granted by the Hong Kong branch into non-performing loans.
It should be noted that the loan, which can be transferred into normal loan at any time, has been changed. The provision can be recovered by the lender.
This happens to be for the very first time that the lender has revealed exact figure for the Dubai World loan. The lender earlier had reverted that it had risk exposure in Middle East, totaling for a very low proportion of the lender's total assets.
New Zealand News
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