Speakers:
Huang Hong, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC);
Cao Yu, vice chairman of the CBIRC;
Xiao Yuanqi, chief risk officer and spokesperson of the CBIRC.
Chairperson:
Xi Yanchun, spokesperson of the State Council Information Office of China
Date:
April 22, 2020
Xi Yanchun:
Ladies and gentlemen, friends from the media, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Huang Hong, vice chairman of the CBIRC, Cao Yu, vice chairman of the CBIRC and Xiao Yuanqi, chief risk officer and spokesperson of the CBIRC. They will brief you about the operations and performance of the banking and insurance sectors in the first quarter. They will also answer your questions.
First, I will give the floor to Mr. Huang.
Huang Hong:
Friends from the media, good morning. First, I will brief you on the prevention and control of the pandemic situation within banking and insurance institutions. As of yesterday, a total of 1,065 people in banking and insurance institutions nationwide had a confirmed COVID-19 infection, including 933 people in Hubei province, and a total of 1016 people have recovered, including 887 in Hubei. 42 people have died, including 41 in Hubei. Some family members of employees of banking and insurance institutions have died from COVID-19. We mourn the loss of them and we will work harder and provide better service to the public to commemorate their death. Currently, seven employees of the banking and insurance institutions are still being treated in the hospital and 8 people are asymptomatic cases, including six in Hubei. One of them has recovered. Up to now, except for Hubei, the resumption rate of banking and insurance institutions across the country is at about 97%, and the resumption rate of banking and insurance branches has reached 99%. More than 60% of banking and insurance institutions, and 90% of banking and insurance branches in Hubei, have resumed work. The resumption rate of banking and insurance institutions and branches in Wuhan have steadily increased, and basic financial services are guaranteed.
Currently, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the progress in prevention and control of the COVID-19 epidemic in China has been further enhanced, and economic and social operations have gradually returned to normal. The CBIRC has resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council. In accordance with the requirements of "maintaining stability in six key areas, namely with respect to employment, finance, foreign trade, foreign investment, domestic investment and expectation" and "ensuring the employment of residents, the basic livelihood of the people, the support for market entities, the security of food and energy, the stability of the supply chain and industrial chain and the operation at grassroots level," we have successively issued many policies and measures to increase financial support for pandemic prevention and control as well as economic and social development. We have been working to facilitate the resumption of work, production, business and the market. We have focused on preventing and defusing financial risks while also ensuring the stable operation of the banking and insurance sector.
First, all-out efforts have been made to provide financial services for pandemic prevention and control. By reducing the deposit reserve ratio, relending and rediscounting, banking institutions have effectively reached out to enterprises that manufacture and transport important medical supplies and daily necessities, providing preferential interest rates and special credit quotas for them. Insurance institutions have set up fast tracks for customers who have been affected by the epidemic to settle claims, appropriately expand the scope of insurance compensation liability and strive to provide insurance for all the insurable and settle the claims that should be settled.
Second, we will provide liquidity support for enterprises in a timely manner and help small and medium-sized enterprises (SMEs) surmount their difficulties. We have increased support for SMEs in terms of credit: inclusive loans for SMEs have increased by 25.93% year-on-year at the end of the first quarter; the interest rates of the inclusive loans issued by the five large banks is 4.3%, 0.3% down the level of 2019. We have also increased credit loans. In the first quarter, credit loans issued to enterprises and individual business owners increased by 2.5 trillion yuan, with the increment almost twice the level of the same period last year. We have optimized loan renewal arrangements, expanded the scale of renewal and helped ease pressure on cash flow among enterprises. In the first quarter, a total of 576.8 billion-yuan loans were renewed, of which nearly 90% went to micro, small and medium-sized enterprises and individual business owners. Business are allowed to defer principal and interest payments, and we have deferred the payments on about 880 billion yuan worth of loans. There are also flexible arrangements for paying mortgage loans and consumption loans, which effectively reduce the pressure on enterprises and residents.
Third, we are looking to maintain the stability of industrial chains and supply chains, as well as support all links in industrial chains to help them resume work and production in a coordinated way. We are taking significant steps to develop supply chain finance, and we have taken the initiative to connect with core enterprises of the industrial chain. Financing support is also being provided for upstream and downstream enterprises of the industrial chain to ensure the smooth flow of funds by means of receivables, orders and warehouse receipt pledges. By the end of the first quarter, banks provided capital turnover to 218,000 core enterprises of the industrial chain, with a balance of 21.4 trillion yuan. Banks also provided financing support to 297,000 upstream enterprises, with a balance of 5.8 trillion yuan. And banks provided financing support to 353,000 downstream enterprises, with a balance of 9.3 trillion yuan.
Fourth, we want to increase financial support for the real economy and promote the expansion of domestic demand. In the first quarter, new yuan-denominated loans hit 7.1 trillion yuan, an increase of 1.3 trillion yuan year-on-year. The new loans were mainly invested in the manufacturing, wholesale and retail and infrastructure sectors, with increased lending in these sectors of 1.1 trillion yuan, 0.9 trillion yuan, 1.5 trillion yuan, respectively, which has effectively supported the development of high-tech manufacturing, the upgrading of traditional industries, household and public consumption and investment in infrastructure. We support direct financing, such as bonds and equity, and provide comprehensive financing services for enterprises. In the first quarter, banks and insurance institutions increased bond investment by 2 trillion yuan, of which more than 360 billion yuan was invested in corporate credit bonds. An additional 126.3 billion yuan of equity investments was invested in insurance.
Fifth, we are seeking to guarantee the functions of the insurance sector. We will actively expand the scope of claims, increase speed and improve the efficiency of claim settlement. Insurance claims in the first quarter totaled 301.9 billion yuan. We will actively deal with social risk protection needs during the pandemic and develop and promote security insurance products, such as health insurance. The health insurance business grew by 21.5% year-on-year. We gave full play to the role of credit guarantee insurance in sharing credit losses. In the first quarter, the payment of credit guarantee insurance was 16.1 billion yuan, which was up 50% year-on-year.
The outbreak of COVID-19 has had an unprecedented impact on China's economic and social development. Loan delinquencies and defaults increased, and non-performing loans increased as a result of the pandemic. The banking industry still maintains a strong ability to withstand risks, and various regulatory indicators are operating at a high level.
Next, CBIRC will earnestly implement requirements for handling trade frictions and keeping employment, the financial sector, foreign trade, foreign and domestic investments and expectations stable, as well as ensuring the employment of residents, the basic livelihood of the people, the support for market entities, the security of food and energy, the stability of the supply chain and industrial chain, and the operation at grassroots level. We will work in a coordinated manner to provide financial support for the prevention and control of the pandemic and to serve the real economy and stave off risks. We will work hard to maintain economic development and social stability, and we will provide strong financial support to win the battle against poverty and for building a moderately prosperous society in all respects.
Thank you！
Xi Yanchun:
Thank you, Mr. Huang. Let's move on to the question and answer section. Please inform us of your news organization before asking questions.
