Banks in Shanghai saw outstanding bad loans and non-performing loan ratio drop last year as lenders curtailed their loans to certain sectors such as property to control financial risks, the local banking regulator said yesterday.
The NPL ratio of lenders in Shanghai shed 0.23 percentage points from the beginning of last year to 0.68 percent at the end of December, when outstanding bad loans shrank 7.6 billion yuan (.1 billion) to 40.4 billion yuan, the Shanghai Office of China Banking Regulatory Commission said in a report.
The improved loan quality was mainly due to "prevention of risks and strengthening of services," the report said.
As Shanghai raised down payments for first-time buyers and tightened their eligibility for mortgages in November, banks in the city conducted a so-called "diversified credit policy" on mortgage applicants and squeezed credit in the property sector.
"The policy should be strictly carried out to curb speculative house buying frenzy to avoid risks," the regulator emphasized.
Shanghai lenders grew their total assets by 11.3 percent to 14.42 trillion yuan last year, according to the report.