Non-performing Loans Worry China's Banking Sector
    2014-04-03 09:44:55         Web Editor: Zhangpeng


Financial results from China's major banks, released over the past few days, have laid bare a worrying rise in non-performing loans, or NPLs.

China's five largest banks, including the Agricultural Bank of China, the Bank of China, the Bank of Communications, the China Construction Bank and the Industrial and Commercial Bank of China, have totaled over 370 billion yuan, or about 60 billion U.S. dollars, in outstanding NPLs as of the end of last year.

That is nearly 47 billion yuan more than a year ago.

Smaller banks, such as China CITIC Bank and China Everbright Bank, are in an even worse fix.

Their outstanding NPLs have surged more than 60 percent and 30 percent respectively.

Commercial banks' outstanding NPLs had stood at over 590 billion yuan by the end of last year, a 99 billion yuan increase.

For more on this, we're joined live now by Cao Can,CRI's Financial Commentator.

Questions :

1,What factors have contributed to the rise in NPLs? And What measures should the five banks take to overcome these factors?

2,The NPL ratio in China's commercial banks was around one percent at the end of last year. Do you think this ratio is risky or reasonable?

3, Besides steel, sectors such as cement, photovoltaics, shipbuilding, and aluminum are haunted by overcapacity. Facing the current economic slowdown and the rise in NPLs, does this pose any significant risk to the economy right now? Will stimulus measures be needed? For example, media have reported that several cities may soon ease housing purchase restrictions. Is it a signal?

Cao Can,CRI's Financial Commentator


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The Beijing Hour updated 20:00 2014/05/23

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