As first published in Reuters, a group of Chinese coal firms are set to cooperate in establishing a new bank that will support coal projects. The coal firms will take advantage of the Chinese Government’s promise to allow more private capital into the financial sector.
The China Coal Bank was co-founded by the Jinben Investment Group and 15 other firms – most of which are coal firms – including state-owned giants Datong Coal Mine Group, the Jincheng Anthracite Mining Group and Shenhua Group.
It is the first bank in the world with coal as the core focus, the bank said on its recently launched website.
The bank, which is currently awaiting approval from China’s cabinet, the State Council and the China Banking Regulatory Commission, would obtain credit by providing equivalent volumes of coal as collateral. It has begun hiring staff.
China’s coal industry has suffered heavy losses this year, as a result of falling coal prices, as well as a government strategy that is looking to make the switch to cleaner fuels.
The bank said it had been set up to help the daily operations and overseas expansion of China’s coal enterprises, noting that “coal companies had been restrained by banks and now are establishing their own, allowing funds to be obtained easily.”
A handful of listed companies have seen their stock prices soar on rumours they are planning moves into banking, amid signs that China Is preparing to open up its financial sector.
The introduction of private banks will increase competition for cash deposits and loans, which could be bad news for the state banks that dominate lending in China.
Adapted from press release by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/22112013/coal_bank_will_be_set_up_by_chinese_coal_firms_285/