Non-performing loans owed to China's commercial banks were
reduced to an all-time low of 8.9 percent at the end of 2005, from
13.2 percent in 2004, according to the latest edition of China
Finance, a bi-monthly publication from the People's Bank of China
(PBC).
This is the first time the rate of bad loans of Chinese banks
has been reduced to a single-digit figure, the report said, quoting
figures from the China Banking Regulatory Commission (CBRC).
It was only in 2003 that 17.9 percent of the loans owed to
Chinese banks were bad loans.
Since then, a total of 1,079.6 billion yuan (about US$130
billion) of non-performing loans have been either transferred to
newly-founded asset management companies or written-off by the
banks.
In 2005 alone, 498.6 billion yuan (about US$62 billion) of bad
loans were cancelled, reducing the bad loan ratio of the banks by
4.3 percent, the CBRC said.
The handling of the banks' huge amount of bad loans has been a
major task for the CBRC since its establishment in 2003.
By the end of 2005, 53 commercial banks had reached the
statutory 8 percent capital adequacy rate. They represent 75
percent of the total number of commercial banks, compared to a
0.6-percent in 2003.
The banks, however, still have a long way to go to increase
their bad loan deposit to the statutory level.
(Xinhua News Agency March 7, 2006)