The nation's largest bank, Industrial & Commercial Bank of China (ICBC), on Thursday disputed a Bloomberg report that the bank's unit in the U.S. had leverage above 260-to-1 as of the end of last year.
In the past four years, ICBC Financial Services has strictly followed the rules of the U.S. Financial Industry Regulatory Authority, keeping the ratio within 20-to-1, domestic news portal finance.ifeng.com reported on Thursday, citing a response from the bank.
ICBC Financial Services, a wholly owned subsidiary of ICBC, has maintained good momentum of development this year, said that company. As of the end of 2016, the subsidiary had $144 million in assets, while its regulatory capital was $7.5 million, according to the statement.
On Wednesday, Bloomberg reported that as of the end of 2016, ICBC Financial Services had about $260 in assets for each $1 of capital.
With 260-to-1 leverage, ICBC had become a "go-to dealer" in the repurchase agreements market, taking on Goldman Sachs Group Inc by using a loophole in U.S. rules intended to keep local banks away from getting too big to fail, according to Bloomberg.
A repurchase agreement, also known as repo, is a form of short-term loan that enables investors to borrow money by selling securities. According to Bloomberg, ICBC started the the repo business in 2010.
