Lower bad loan ratios for Chinese banks
Chinese commercial banks, saddled with billions of dollars in bad debts, saw their bad loan ratios drop by 1.1 per cent points in the first half of the year to a record low at 7.5 per cent by end June, the nation's banking watchdog has claimed.
By PTI |
BEIJING: Chinese commercial banks, saddled with billions of dollars in bad debts, saw their bad loan ratios drop by 1.1 per cent points in the first half of the year to a record low at 7.5 per cent by end June, the nation's banking watchdog has claimed.
Bad loans owed to Chinese banks totaled 160 billion US dollars at the end of June, the China Banking Regulatory Commission (CBRC) said.
The bad loan ratio, or the ratio of bad loans to total lending, is a key measure of banks' financial health.
The report shows that China's state-owned banks had a bad loan ratio of 9.5 per cent at June 30, much higher than listed banks' 3.1 per cent or foreign banks' 0.9 per cent.
China has been working hard to reform its creaky banking system-- previously dominated by large state-owned banks-- to avoid risks spilling over from the banking sector and also to prepare its banks for competition from foreign banks in a more open market.
China is scheduled to open its banking sector to foreign banks on December 11 this year under a commitment made to the World Trade Organisation (WTO) by the Communist giant while becoming a full-fledged member in 2001.
As part of the reform, state-owned banks have been transformed into banks with shareholding, including foreign stakeholders, and listed on the stock market. The Chinese government has also injected billions of dollars into the banks to improve their capital adequacy ratios.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
