NPL ratio improved in 2010
January 31, 2011 Category Finance, Weekly
The non-performing loan ratio of commercial banks averaged 1.14% at the end of 2010, down from 1.58% at the start of the year, according to data published by the China Banking Regulatory Commission (CBRC). The total industry-wide volume of bad loans fell to CNY429.3 billion from CNY497.3 billion during that time. The CBRC also said that banks’ provisions for loan losses were equal to 218.3% of the bad debt on their books at the end of 2010, up from 155% coverage at the start of the year. Analysts expect more fund raising this year to ensure that the banks keep ahead of the regulatory requirement of an 11.5% capital adequacy ratio (CAR). A series of successful fund raising efforts nudged up the sector’s average capital adequacy ratio (CAR) to 11.6% at the end of the third quarter from 11.4% at the start of the year. The CBRC did not disclose the end-year CAR in its latest data.
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