Banks post NPL ratio decline to 8.9 pct
(Xinhua)
Updated: 2006-05-30 07:18
Major Chinese banks posted an 8.9 percent non-performing loan ratio by April,
down sharply from the 17.9 percent reported at the end of 2003, the regulator
said Monday.
But the figure was still alarmingly high compared with the one to two percent
level reported by sophisticated foreign banks.
Chinese officials and analysts acknowledge banks piled up a mountain of bad
debts due to reckless lending to state-owned enterprises over the past decades.
In recent years, China is pushing for corporate governance at banks and
listing them in the stock market, as preparations for the full opening of the
Chinese market to foreign rivals by the end of this year.
China Banking Regulatory Commission (CBRC) said in a statement the country's
banking assets totaled nearly 40 trillion yuan by the end of April, accounting
for more than 95 percent of all financial institutions asset.
The number of banking institutions stood at more than 28,000, it said.
Chinese financial institutions also include securities brokerages, insurers and
trust companies.
The CBRC also said 53 banks reported a capital adequacy ratio -- a bank's own
capital in proportion to its total lending -- of more than 8 percent, the
minimum international requirement for healthy management, up from just eight at
the end of 2003.
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