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December 25, 2014

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Curbing loan risks in 2015

CHINESE banks, which suffered a steady rise in bad loans this year, must step up efforts to rein in lending risks in 2015, the banking regulator said.

The average non-performing loan ratio of Chinese banks was at 1.31 percent at the end of November, the China Banking Regulatory Commission said in a statement.

That marked a rise from 1.16 percent at the end of September and 1.08 percent at June’s end.

“We should be fully aware of the trend of a rebound in non-performing loans and effectively prevent potential risks,” the CBRC said.

The rise in the ratio across the whole banking sector is in line with anecdotal evidence of an increase in bad loans seen recently in some provinces plagued by industry overcapacity.

In 2015, banks must better manage liquidity risks and control risks from fluctuations in the value of loan collateral, the CBRC said, adding that banks face challenges from slower credit expansion to narrower interest rate margins.




 

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