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Chinese banks see bad loan ratio unchanged

By Hu Xiaocen | August 1, 2013, Thursday | Online Edition
Non-performing loans at Chinese banks rose to 539.5 billion yuan (US$88 billion) at the end of June from 526.5 billion yuan three months ago, while the NPL ratio remained at 0.96 percent, the China Banking Regulatory Commission said.
 
Outstanding loans to local government financing platforms grew 6.2 percent year on year to 9.7 trillion yuan at the end of June, the CBRC said in a statement posted yesterday on its website, adding that the increase was 9 percentage points lower than the average growth rate of all loan categories.
 
Outstanding wealth management products were 9.08 trillion yuan at the end of June. Almost 31 percent of that, or 2.78 trillion yuan, were invested in non-standard debts, 7 percent lower than that before the regulator introduced new rules to tame the fast growing sector. Non-standard debts refer to debt-based assets that are not traded in interbank markets or on stock exchanges, such as trust loans.
 
The CBRC placed a cap of 35 percent earlier this year on the size of wealth management products invested in non-standard debts.
 
The top banking regulator said it will prevent risks in credit, liquidity, asset management products and trust business.
 
The CBRC also said in a separate statement published today that it will crack down on illegal fundraising activities. A three-month campaign will be launched to clean up advertisements that promote the illegal activities via all types of media including newspapers, magazines, radio, television, online media, flyers and short message service.
 
In China, a total of 4,170 people have been punished since 2011 for illegal fundraising, according the Supreme People’s Court.
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