Asian 100: Bank clean-up slows

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Asian 100: Bank clean-up slows

Asia’s clean-up of its banking mess is losing momentum. There is recognition of what needs to be done but getting there is proving difficult. The crisis atmosphere has abated and economic recovery will pull the banks along with it. But failure to deal with bad debts will hold countries back.

Equitable PCI Bank (48) is the joint highest climber in the Asia-Pacific Top 100 banks following the merger of Equitable Banking Corporation, with its focus on the region's Chinese population, and Philippine Commercial International Bank, which lends more to the corporate and ethnic Filipino market. Philippine banks remain in generally good health, though depositors have been spooked by cronyism - in a recent auction of the government's entire 30% share in Philippine National Bank the sole bidder was Lucio Tan, an ally of president Joseph Estrada.


Thanks to currency and capital controls, China has so far been largely spared from the troubles of the rest of Asia and takes the four top places for non-Japanese banks. Shanghai Pudong Development Bank (up from 97 to 54) is benefiting from the development of the Pudong district of Shanghai and has one of the lowest NPL ratios of its peers. The collapse in October 1998 of GITIC, the former investment arm of the Guangdong provincial government, focused attention on the true state of health of China's financial institutions. Foreign creditors complained about a lack of transparency in the bankruptcy proceedings, alleging that closed-door government dealing might have been infringing on their rights.


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