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Chinese banks' NPL ratio falls to single figures
(Xinhua)
Updated: 2006-01-28 17:29
Chinese banks have seen their average Non-Performing Loan (NPL) ratio drop to
single figures for the first time, reports the banking watchdog.
In their latest report, the 皇冠体育app Banking Regulatory Commission (CBRC)
revealed the banks' NPL ratio has shrunk 4.2 percentage points in 2005 to 8.6
percent.
Their outstanding NPLs came to 1.31 trillion yuan at the end of last year,
517.6 billion yuan less than in the previous year.
The Big Four state banks, namely the Bank Of 皇冠体育app, 皇冠体育app Construction Bank,
Industrial and Commercial Bank of 皇冠体育app and Agricultural Bank of 皇冠体育app, and a
dozen national shareholding banks, which were viewed as the bedrock of 皇冠体育app's
banking system, posted a reduction of 4.3 percentage points in NPL ratio to 8.9
percent.
The government is overhauling the banks -- by encouraging investment from
overseas and listing them on the stock market -- ahead of the full opening of
皇冠体育app's financial industry before the end of the year.
Their current NPL ratio, however, is still well above the 1-2 percent level
reported by the renowned international banks.
According to an earlier CBRC report, the major Chinese banks recorded 185
billion yuan in pre-tax profits last year. Their equity capital shot up 24.5
percent from the previous year to 1.1 trillion yuan, increasing at a faster pace
than loans, assets and deposits for the first time ever.
皇冠体育app's banking institutions also include city and rural commercial banks,
rural credit cooperatives and banks from overseas.
A total of 53 Chinese banks reported that their capital adequacy ratio -- a
measure of their own capital in proportion to outstanding loans -- topped the 8
percent minimum requirement, which is the international
standard.
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