The bad loan ratio at Chinese lenders increased to 1.5 percent at the end of June, the banking regulator said.
The ratio was 0.11 percentage point higher than it was at the end of March. The value of outstanding non-performing loans (NPLs) climbed by 109.4 billion yuan to 1.09 trillion yuan, the China Banking Regulatory Commission announced.
An NPL is a loan that is in default or close to being in default.
The CBRC said the commercial banks’ credit risk is “generally controllable” and the lenders’ overall capability to offset risks remains stable.
The banks’ loan loss provisions, or funds set aside to cover potential loan losses, increased by 83.5 billion yuan to 2.17 trillion yuan by the end of June.
The average capital adequacy ratio, the ratio of a bank’s capital to its risk-weighted assets, fell by 0.18 percentage point to 12.95 percent, but the CBRC said the level was still “relatively high.”
As of the end of June, total assets at banks grew by 12.75 percent year on year to reach 188.5 trillion yuan, according to the CBRC.
Outstanding loans to the agricultural sector and small and micro businesses grew by 11.5 percent and by 15.5 percent year on year respectively, outpacing average loan growth.
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