Mainland companies need to keep better books to help the country's banks reduce their bad loans, the chief bank regulator said yesterday.
China Banking Regulatory Commission (CBRC) chairman Liu Mingkang said banks could reduce non-performing loans by getting clear financial figures from the companies they lent money to.
'Reliable figures come from advanced accounting standards and effective arrangements for disclosure, collection and dissemination,' Mr Liu said. 'We are making great efforts to move in that direction. I regard this as my mission.'
Mainland banks have fundamental discrepancies in their accounts, including the size of the non-performing loans, which range from the official 22 per cent to a widely accepted 45 per cent.
Many analysts say further public offerings of the Big Four banks will be delayed until investors are comfortable with the veracity of the numbers they see in the bank documents.
Accounting standards differ widely from accepted practices in Hong Kong and in the west, leading to significant variations in company valuations.
