July 23 (Bloomberg) -- China Everbright Bank Co. rejected a Goldman Sachs Group Inc. research note which said the bank has too much exposure to local government debt, Xinhua News Agency said, citing a senior official at the bank it didn’t identify.
The bank’s loans to local government financing vehicles were 94.9 billion yuan at the end of the first quarter, accounting for 11.5 percent of its total loan book, much less than the 20 percent estimated by Goldman, the official told state-owned Xinhua in an interview.
The bank’s loan-to-deposit ratio was 71.15 percent at the end of last year, much lower than the 81 percent estimated by Goldman, the Xinhua report said.
The lender will continue to reduce loans to local government financing vehicles and make sufficient provisions for bad debt, the official told Xinhua. The bank won’t extend any new loans to local governments below the provincial level, it added.
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