China raises capital requirement for top five banks: report

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April 26, 2011 2:14 PM EST

China has increased capital requirements for its five biggest banks above the minimum 11.5 percent mark to guard against risks in the banking sector, Bloomberg reported on Tuesday.

Citing three sources with knowledge of the matter, Bloomberg said Industrial & Commercial Bank of China <601398.SS> <1398.HK>, the world's biggest bank by stock market value, was told last month to have a capital adequacy ratio of at least 11.8 percent.

Three other rivals of Industrial & Commercial Bank of China were told the same, with Agricultural Bank of China <601288.SS> <1288.HK> as the exception -- it was told to have a ratio of 11.7 percent.

The three other top Chinese banks are China Construction Bank <601939.SS> <0939.HK>, Bank of China <601988.SS> <601988.SS><3988.HK>, and Bank of Communications Co Ltd <3328.HK> <601328.SS>.

An official in the press office at the China Banking Regulatory Commission, contacted by Reuters on Tuesday, denied that capital adequacy ratios had been raised for the banks.

A document obtained by Reuters in February showed China's banking regulator could raise the capital adequacy ratio for banks to as high as 14 percent.

A 14-percent level would be 250 basis points above the minimum 11.5 percent mark, and would be implemented as an additional counter-cyclical requirement if the regulator thinks credit growth is abnormally strong.

(Reporting by Koh Gui Qing; Editing by Ken Wills)

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