OREANDA-NEWS. May 08, 2014. China Banking Regulatory Commission (CBRC) officially approved Agricultural Bank of China Limited (ABC) to adopt non-retail primary internal rating approach and retail internal rating approach for credit risk and standard approach for operational risk at corporate and Group levels.

Due to its late stock reform, ABC is a new comer in implementing the New Capital Accord among the large banks. Nevertheless, ABC gave full play to its advantages and made staged achievements which are recognized by the regulator, marking it one of the first banks adopting advanced capital management approaches. 

It is learnt that ABC has established domestically leading internal rating model for credit risk. Its rating result witnesses deeper and wider application in policy making, credit approval, loan pricing, limit management, loss reserve, economic capital and performance evaluation. In addition, ABC has completed its projects of internal model approach for market risk and advanced measurement approach for operational risk, which are on trial operation. Risk management across ABC has shifted from qualitative to quantitative, project fruits gradually integrated traditional approaches, and its risk control capacity been remarkably improved.

The approval for implementing the advanced capital management approaches will help ABC break the capital bottleneck in its business development and further reduce its market financing cost. It will also improve its scientific and sophisticated risk management, and effectively support its decision-making concerning business operation and management. ABC will adhere to the management concept of “big risk” to consolidate risk management and improve the comprehensive risk management system. It will also push forward application of results of the advanced capital management approaches, strengthen capital constraint, build up risk resistance and promote business transformation, so as to provide better support and service for Sannong and real economy.