Non-performing loan ratio of China's commercial banks drops to 7.5 pct

China's commercial banks saw their non-performing loan (NPL) ratio drop 1.1 percentage points to 7.5 percent from January to June, according to the China Banking Regulatory Commission (CBRC).

The fall indicated the banking industry had improved its ability to fend off risks, said the CBRC.

By the end of June, non-performing loans stood at 1.28 trillion yuan (160 billion U.S. dollars), 43.5 billion yuan down from the beginning of the year.

State-owned commercial banks had bad loans of 1.055 trillion yuan, 16.5 billion yuan less than the start of the year, with their NPL ratio falling one percentage point to 9.5 percent.

In the first six months, 480 criminal acts were reported in financial institutions of the banking industry, 89 cases fewer than the same period last year.

The CBRC has instructed banks to increase their reserve funds to cushion against possible losses caused by bad loans.

By the end of June, major commercial banks had a total loan loss reserve of more than 300 billion yuan, and 12 had reserve funds that could cover all possible loan losses.

Source: Xinhua