The Xinhua Finance/Milken Institute China's Banking Strength Indicator (BSI) measures the financial strength of Chinese banks, benchmarked to the top fifteen international banks according to their Tier-1 capital. The compilation process relies on CAMELS, a rating system widely used in bank examinations that assesses capital, asset quality, managing expenses, earnings, liquidity, and sensitivity to market risk.

Next Release: April 2008

Current Value: 5.06 (December 2006)

Methodology: China's Banking Strength Indicator is based on the CAMELS rating of the Chinese banks relative to top fifteen non-Chinese banks, according to Tier 1 capital measures. Each component of CAMELS is also based on underlining variables including, but not limited to: capital asset ratio, Tier 1 capital ratio; the ratio of nonperforming loans to gross loans; loan-loss coverage ratio; cost-to-income ratio; return on assets; return on equity; the ratio of liquid assets to deposits; and the ratio of non-interest-based revenue to total assets. The availability of current financial statements will determine the number of included banks.

Time Period Coverage and Frequency: The indicator, produced semiannually, begins at year-end 2000 and extends annually to the present.

Sources of Data: The data used in the construction of the indicator are obtained from Bankscope and CEIC Data.

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