NPL growth stabilizing at major lenders

Updated 2017-09-01 09:01:23 China Daily

Signs of stabilization in the growth of nonperforming loans emerged for China's large commercial banks in the first half of 2017, but banking industry experts remain concerned about the risks associated with existing loans and new types of risk.

The NPL ratios of the four largest commercial lenders by assets all dropped from the end of last year, according to their interim results announcements.

Agricultural Bank of China Ltd recorded the biggest fall among the top four banks by 18 basis points to 2.19 percent, followed by Bank of China Ltd (by 8 basis points to 1.38 percent), Industrial and Commercial Bank of China Limited (by 5 basis points to 1.57 percent) and China Construction Bank Corp (by 1 basis point to 1.51 percent).

Data from China's top banking regulator show that the NPL ratio of commercial banks stood still at 1.74 percent for three consecutive quarters. The proportion of special-mention loans, potentially weak loans presenting an unwarranted credit risk, to total loans fell from 4.1 percent in the third quarter of 2016 to 3.64 percent in the second quarter of this year.

Wen Bin, chief researcher at China Minsheng Banking Corp Ltd, said: "We could see that the pressure of growth in new nonperforming loans is lessening, and the increase in NPLs will stabilize gradually.

However, he added: "As a large number of companies are carrying out supply-side reform by reducing overcapacity and debt to asset ratios, potential risks of NPL exposure for commercial banks will still arise. Therefore, prevention and control of NPL exposure and disposal of NPLs will remain a major task for banks in the next period."

As risks will continue to accumulate and new types of risk have started to emerge, Guo You, China Construction Bank's chairman of the board of supervisors, said on Thursday: "We look forward to using our new IT system, which was launched earlier this year and reintegrated our management and service models, to improve the risk management ability by digging into big data."

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58November 18 2017 14:11:26

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16November 18 2017 14:11:26

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18November 18 2017 14:11:26

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords