Chinese Banks’ Bad Debt Ratio Reported 1.5% Rise


Published Date : Aug 10, 2015

The bad loans ration among Chinese banks has reported a rise by 1.5% in the quarter ended on 30th June, 2014. It is 0.11% higher than the quarter ended in March, 2015. The value of outstanding non- performing loans rose by US$17.6 billion, stated the banking regulator of the Republic of China. 

The ratio was 0.11% point up than it was in the end of March, 2015, with the outstanding non-performing loans’ values rising to 109.4 billion Yuan (US$17.6 billion) and reaching 1.09 trillion Yuan (US$175.53 billion), CBRC, the China Banking Regulatory Commission, said. 

An NPL is a defaulted debt or which is close to being in default.

The CBRC stated that the credit risks of the commercial banks is usually controllable and the overall capability of lender to offset risks remains the same. 

The loan loss provisions of banks, or the funds that is set aside to cover the potential loan losses, have added 83.5 billion Yuan in the banks’ capital to reach 2.17 trillion Yuan by 30th June, 2015. 

The average capital adequacy ratio, the ratio of the capital of a bank to its risk-weighted assets, declined 0.18% point to 12.9%, but the CBRC stated the level was still relatively high, as reported by a State-run news agency.  As of the end of June, the total assets of Chinese banks grew 12.75% on year on year basis to reach 188.5 trillion Yuan, as per the CBRC. 

The outstanding loans to the agricultural industry and small and micro businesses increased 11.5% and 15.5% on year on year basis respectively, outperforming average loan rise in the country.