Almost 70 percent of Chinese bankers said comprehensively enhancing risk management abilities is the top priority for banks to make a strategic transition, according to a recent survey.

Over 60 percent of Chinese bankers highlighted concentrated outbreaks of nonperforming loans as the top risk faced by the banking sector. Almost 64 percent of the bankers forecast that the nonperforming loans ratio is likely to increase, said a survey report jointly issued by the China Banking Association and PwC on Tuesday.

The survey was conducted in 31 provincial-level administrative divisions last year, recovering 2,380 valid questionnaires from various banking institutions.

Bankers revealed their top risk concern while the quality of credit assets has started to stabilize.

The balance of nonperforming loans of Chinese commercial banks declined by 6.8 billion yuan ($1.02 billion) quarter-on-quarter to 2.03 trillion yuan at the end of the fourth quarter in 2018. During the same period, the ratio dropped by 4 basis points to 1.83 percent, according to data released by the China Banking and Insurance Regulatory Commission on Monday.

Apart from bad loans, 52 percent of bankers surveyed said they will pay close attention to risks associated with local government debt.

In terms of credit risk, more than 60 percent of the bankers regarded the risk associated with loans to industries identified with excess capacity as the No 1 credit risk of the banking sector, followed by micro and small-sized enterprise loans (46.3 percent) and real estate development loans (36.8 percent).