Banks' NPLs climb for 2nd quarter
By Feng Jianmin |
May 18, 2012, Friday
|
Print Edition
Print Edition
BAD loans at Chinese banks rose for the second straight quarter for the first time since 2005 due to worsening asset quality on an economic slowdown, and banks will face pressure to sustain profits.
The non-performing loans rose by 10.3 billion yuan (US$1.63 billion) in the first three months of this year to 438.2 billion yuan, the China Banking Regulatory Commission said in a statement on its website yesterday.
But the NPL ratio, the size of bad loans against total lending, fell to 0.9 percent from 1 percent in December.
The first-quarter results showed that the size of NPLs fell in the country's five largest lenders - the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, China Construction Bank and the Bank of Communications.
Swiss bank UBS estimated that the Chinese lenders' bad loan ratio may rise to 1.05 percent by the end of this year due to a slowing economy.
The CBRC statement said NPLs rose in the transport, mining, agriculture, construction and retail industries. The bad loan ratio rose for banks in the Yangtze Delta region, where private lending flourished with insufficient regulations.
But risks in the property sector and local government loans are "controllable" for listed banks, it said.
An Ernst & Young report on Wednesday said banks in China won't sustain the rapid profit growth they made last year due to an economic slowdown.
The non-performing loans rose by 10.3 billion yuan (US$1.63 billion) in the first three months of this year to 438.2 billion yuan, the China Banking Regulatory Commission said in a statement on its website yesterday.
But the NPL ratio, the size of bad loans against total lending, fell to 0.9 percent from 1 percent in December.
The first-quarter results showed that the size of NPLs fell in the country's five largest lenders - the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, China Construction Bank and the Bank of Communications.
Swiss bank UBS estimated that the Chinese lenders' bad loan ratio may rise to 1.05 percent by the end of this year due to a slowing economy.
The CBRC statement said NPLs rose in the transport, mining, agriculture, construction and retail industries. The bad loan ratio rose for banks in the Yangtze Delta region, where private lending flourished with insufficient regulations.
But risks in the property sector and local government loans are "controllable" for listed banks, it said.
An Ernst & Young report on Wednesday said banks in China won't sustain the rapid profit growth they made last year due to an economic slowdown.
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