Bank of Communications expects its general provision to rise 40 per cent this year to meet a statutory requirement.
Chief financial officer Yu Yali, during an online presentation yesterday of the bank's A-share listing, said that its general provision would rise to 6.208 billion yuan this year from 4.428 billion last year.
'Our general provision will meet the statutory requirement if the resolution is approved by shareholders and implemented,' she said.
The general reserve can be treated as core capital, she said without disclosing the minimum required level.
Bocom's capital adequacy ratio stood at 10.83 per cent last year, more than the 8 per cent minimum requirement. Its core or tier-one capital stood at 8.52 per cent.
An analyst at a European bank said the move was expected, as under Ministry of Finance rules and Chinese accounting standards, financial institutions had to meet a certain level of general reserve by next year.
He said it would not affect Bocom's earnings as the provision was made after tax and would be treated as a balance sheet item rather than a profit and loss account item.
