China's NPLs fall marginally in May
(Xinhua)
Updated: 2006-06-30 12:52
Major Chinese banks saw their non-performing loan (NPL) ratios fall only
slightly to 8.02 percent on average by the end of May, a senior Chinese banker
revealed Friday.
The "big four" state banks and 15 smaller national shareholding banks, the
bedrock of China's financial system, kept 1.2 trillion yuan in outstanding NPLs,
3.7 billion yuan less than a month earlier, China Banking Association President
Guo Shuqing said.
"It takes time to dispose of the NPLs," Guo told an economic forum in
Beijing. "But the NPLs will be on the decrease."
Chinese banks piled up a mountain of bad loans due to reckless lending over
the past decades. The government transferred 1.4 trillion yuan of NPLs from the
"big four" -- the Industrial and Commercial Bank of China, the Bank of China,
China Construction Bank and the Agricultural Bank of China -- to asset
management companies in a 1999 bailout move.
Domestic banks are moving to transform themselves into shareholding companies
and seek stock market listings to help upgrade business ahead of the full
opening of the financial market to foreign competition by the end of this year
under a WTO commitment.
"For state-owned commercial banks, their internal corporate governance should
continue to be strengthened," said Guo, who is also chairman of China
Construction Bank.
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