Banks face asset quality test
By Hu Xiaocen |
May 8, 2013, Wednesday
|
Print Edition
Print Edition
CHINESE banks will face asset quality challenges this year as bad loans continued to rise in the first quarter after the big five lenders wrote off 25 billion yuan (US$4 billion) of sour loans last year, Deloitte Touche Tohmatsu Ltd said.
The bad loans at the 16 listed lenders on the Chinese mainland totaled 424 billion yuan (US$68.2 billion) by the end of March, 21.9 billion yuan more than the end of last year, according to the lenders' financial results for the first three months, Deloitte said in a report released yesterday in Shanghai.
But the bad loan ratio stayed below 1 percent on average.
"Chinese lenders have low non-performing loan ratios compared to their foreign peers because credit assets expanded at a faster pace than the rise in bad loans, which casts a 'dilution effect' (on the bad assets)," said Deloitte.
China's top-five lenders, the Industrial and Commercial Bank of China, China Construction Bank, the Agricultural Bank of China, the Bank of China and the Bank of Communications, wrote off 25 billion yuan of bad loans last year, a surge of 110 percent from a year earlier, according to Deloitte.
"The write-off and disposal of non-performing loans will be the primary tool for lenders to reduce pressure from deteriorating assets," said Deloitte.
The bad loans at the big five banks totaled 340.8 billion yuan by the end of March, or 80.4 percent of the listed lenders' total.
The report also said the accumulation of credit risks in local government financing platform, real estate, solar energy, wholesale and retail sectors also weighs on the banks' growth.
The bad loans at the 16 listed lenders on the Chinese mainland totaled 424 billion yuan (US$68.2 billion) by the end of March, 21.9 billion yuan more than the end of last year, according to the lenders' financial results for the first three months, Deloitte said in a report released yesterday in Shanghai.
But the bad loan ratio stayed below 1 percent on average.
"Chinese lenders have low non-performing loan ratios compared to their foreign peers because credit assets expanded at a faster pace than the rise in bad loans, which casts a 'dilution effect' (on the bad assets)," said Deloitte.
China's top-five lenders, the Industrial and Commercial Bank of China, China Construction Bank, the Agricultural Bank of China, the Bank of China and the Bank of Communications, wrote off 25 billion yuan of bad loans last year, a surge of 110 percent from a year earlier, according to Deloitte.
"The write-off and disposal of non-performing loans will be the primary tool for lenders to reduce pressure from deteriorating assets," said Deloitte.
The bad loans at the big five banks totaled 340.8 billion yuan by the end of March, or 80.4 percent of the listed lenders' total.
The report also said the accumulation of credit risks in local government financing platform, real estate, solar energy, wholesale and retail sectors also weighs on the banks' growth.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔＄粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
