Industrial and Commercial Bank of China Ltd said on Friday the impact of China's deferral policy for principal and interest repayments for micro, small and medium-sized enterprises on the bank's asset quality remains under control.

"Holding expectations for China's strong economic growth (this year), the recovery of production and operations of domestic enterprises will speed up. As a result, temporary problems with capital turnover brought by the COVID-19 pandemic will be eased. This will be conducive to banks' efforts to mitigate risks associated with the loans offered to companies under the deferral policy for principal and interest repayments," said Wang Jingwu, vice-president of ICBC, China's largest State-owned commercial lender.

While implementing the policy, the bank ensured its clients and loans which benefit from the policy met the relevant regulatory requirements. It also carefully screened risks associated with such loans and took different measures to dissolve risks in an orderly manner, Wang said at a news conference announcing the bank's financial results for 2020.

"As the pandemic is getting better and economic recovery is accelerating, a large part of corporate loans whose principal and interest repayments were deferred have restored the previous interest calculation methods, and the overall risk related to the rest of the loans remains controllable. As of the end of 2020, only 0.8 percent of loans offered by ICBC under the deferral policy to micro and small businesses had turned sour," he said.

By the end of last year, the bank's ratio of overdue loans was 1.44 percent of total lending, falling by 0.16 percentage points from the end of 2019. Its ratio of special mention loans, potentially weak loans presenting an unwarranted credit risk, was 2.21 percent of total lending, down 0.5 percentage points during the same period. Its nonperforming loan ratio was 1.58 percent, up 0.15 percentage points, but the number still remained in a stable range, he said.