BEIJING: Chinese lenders saw their bad-loan ratio increase to 1.5 percent at the end of June, the country’s banking regulator said here the other day.
The ratio was 0.11 percentage points higher than it was at the end of March, with the value of outstanding non-performing loans (NPLs) rising 109.4 billion yuan to 1.1 trillion yuan (US$177 billion), the China Banking Regulatory Commission said.
An NPL is a loan that is in default or close to being in default.
The CBRC said the commercial banks’ credit risk is “generally controllable” and that lenders’ overall capability to offset risks remains stable.
The banks’ loan loss provisions, or funds set aside to cover potential loan losses, rose 83.5 billion yuan to 2.17 trillion yuan at the end of June.
The average capital adequacy ratio, the proportion of a bank’s capital to its risk-weighted assets, fell 0.18 percentage points to 12.95 percent, but the CBRC said the level was still “relatively high.”
At the end of June, Chinese banks’ total assets grew 12.75 percent year on year to reach 188.5 trillion yuan, it said.
Outstanding loans to the agricultural sector, as well as those to small and micro-businesses grew 11.5 percent and 15.5 percent year on year, respectively, outpacing average loan growth, the regulator said.
