Chinese banks reported record-high net profits in 2011. According to data from the China Banking Regulatory Commission (CBRC), Chinese commercial lenders had a net profit of more than CNY1 trillion in 2011, an increase of 36.3% from the year before. They also reported net interest income of CNY2.15 trillion in 2011, up by 29.3% from the year before, and their non-interest income increased by 46.3% to CNY514.9 billion. Lenders’ total assets reached CNY88.4 trillion by the end of 2011, up 19.2% from a year earlier. Chen Yongjie, Deputy Secretary of the China Center for International Economic Exchanges, said Chinese banks’ net profit per capita is 12 times as large as that of manufacturers. Although commercial banks still enjoy high profits, their rate of increase has fallen below what it had been in previous years, said Guo Tianyong, Director of the Central University of Finance and Economics’ Research Center. “In 2005 and 2006, banks had a profit growth rate of between 50% and 60%,” Guo said. The amount of non-performing loans (NPLs) increased in the fourth quarter. By the end of 2011, the non-performing loan ratio stood at 0.96%, up by 0.01 percentage point from the third quarter. In the fourth quarter, the amount of outstanding bad loans increased by CNY20.1 billion. UBS Securities Co earlier predicted that Chinese banks will face a capital shortfall of more than CNY220 billion in 2012 and will need more than CNY295 billion in 2013. Local media reported that publicly listed lenders may raise more than CNY100 billion through equity financing this year. Banks’ average capital adequacy ratio (CAR) reached 12.7% by the end of the year, 0.55 percentage point higher than a year earlier and 0.39 point higher than three months ago. Liu Ligang at ANZ Banking Group said banks brokered fewer loans than expected in the first 15 days of February. That, he said, was the chief reason the central bank reduced the reserve requirement ratio (RRR).