Chinese bank loans to local government-backed investment units are controllable, according to the interim results of listed banks, but the scale of these local financing platforms are still unclear, the National Business Daily reported today.

By Tuesday, seven listed banks had released their interim results and an industry insider says these reports show that banks have done a relatively good job at reining in the risks of local governments' financing platforms. "They have operated according to regulations," the person told reporters.

But there is no specific data on local debts in these banks' half-year reports. The insider said that is because the accounting rules for local debts among banks have not been unified and the information is not ready for publication yet.

According to the interim results, the Bank of Construction has about 500 to 600 billion yuan in debts to local financing units and the bad debt ratio is 0.11 percent. The ratio for The Merchants Bank is 0.09 percent

In June, China's State Council ordered local governments to better manage investment vehicles amid concern that their borrowings, estimated at hundreds of billions of yuan, could cause problems for Chinese banks.

(China Daily August 26, 2010)