NPLs grow for 3rd straight quarter
By Hu Xiaocen |
August 16, 2012, Thursday
|
Print Edition
Print Edition
CHINA'S bad loans increased for a third straight quarter for the first time in eight years, accentuating concerns over lenders' asset quality and profit growth as the economy continues to weaken.
Non-performing loans grew 18.2 billion yuan (US$2.86 billion) to 456.4 billion yuan in the second quarter of this year, while the NPL ratio stayed the same as the first quarter at 0.9 percent, the China Banking Regulatory Commission said in a statement on its website yesterday.
Bad loan balance surged at all types of lenders, including big state-owned banks, city commercial banks, rural banks and foreign banks, the CBRC said.
The NPL ratio at joint-stock commercial banks, rural banks and foreign banks picked up 0.1 percentage point to 0.7 percent, 1.6 percent and 0.6 percent, respectively. The ratio at the other types of lenders stayed put.
The People's Bank of China, the nation's central bank, warned commercial banks on Tuesday about the possibility of financial systemic risk emerging from soaring bad loans.
"The asset quality of commercial banks is deteriorating as economic growth retreats," the central bank said in a commentary published in its official newspaper. "The enterprises have met more hardships in their operations. Weak demand and surging costs have squeezed their profits."
Apart from rising defaults, Chinese lenders are also grappling with weaker loan demand and trimmer profitability after the nation's economic growth decelerated for a sixth quarter and the central bank cut interest rates twice this year.
New yuan loans amounting to 540.1 billion yuan in July were the lowest in 10 months, PBOC said last week, while the banks' combined net income growth slowed to 23 percent in the second quarter from 24 percent in the first, the CBRC said.
Non-performing loans grew 18.2 billion yuan (US$2.86 billion) to 456.4 billion yuan in the second quarter of this year, while the NPL ratio stayed the same as the first quarter at 0.9 percent, the China Banking Regulatory Commission said in a statement on its website yesterday.
Bad loan balance surged at all types of lenders, including big state-owned banks, city commercial banks, rural banks and foreign banks, the CBRC said.
The NPL ratio at joint-stock commercial banks, rural banks and foreign banks picked up 0.1 percentage point to 0.7 percent, 1.6 percent and 0.6 percent, respectively. The ratio at the other types of lenders stayed put.
The People's Bank of China, the nation's central bank, warned commercial banks on Tuesday about the possibility of financial systemic risk emerging from soaring bad loans.
"The asset quality of commercial banks is deteriorating as economic growth retreats," the central bank said in a commentary published in its official newspaper. "The enterprises have met more hardships in their operations. Weak demand and surging costs have squeezed their profits."
Apart from rising defaults, Chinese lenders are also grappling with weaker loan demand and trimmer profitability after the nation's economic growth decelerated for a sixth quarter and the central bank cut interest rates twice this year.
New yuan loans amounting to 540.1 billion yuan in July were the lowest in 10 months, PBOC said last week, while the banks' combined net income growth slowed to 23 percent in the second quarter from 24 percent in the first, the CBRC said.
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