(28 August 2006 – China) China Banking Regulatory Commission has reported a sharp drop in non-performing loans between April and June for the second quarter in a row.The regulator said the NPL ratio for all banks fell to 7.50 percent at the end of June from 8.03 percent at the end of March and 8.61 percent at the end of 2005.
China’s total outstanding non performing loans was 1.28 trillion yuan (US$160 billion) at the end of June.
The Commission has told banks to control their credit and lending processes more tightly to avoid perpetuating bad loans.
“This year, banks have earnestly implemented macroeconomic policies and made progress in terms of limiting the expansion of credit, adjusting the structure of loans and improving risk management,” China Banking Regulatory Commission said.
It said China had 55 banks whose capital adequacy ratio was above eight percent, two more than at the end of 2005.