China’s Total Banking Sector Assets Exceed Quarter of a Quadrillion Yuan

Total assets in China’s banking sector have continued to post robust growth in 2017, with some of the country’s state-owned lenders emerging as globally important financial institutions.

Data from the China Banking Regulatory Commission (CBRC) indicates that the Chinese banking sector’s total assets posted year-on-year growth of 8.7% in 2017 to hit 252 trillion yuan (approx. USD$39.9 trillion) by the year’s end.

As of the end of 2017 China’s banking sector was host to a total of 4.549 financial institutions.

The non-performing loan ratio of China’s commercial banks was 1.74% as of the end of last year, having plateaued for over a year after declining for the first time since 2012 in the final quarter of 2016.

Outstanding bad loans stand at 1.71 trillion yuan, while the capital adequacy ratio and liquidity coverage ratio of Chinese commercial banks are at 13.65% and 123.26% respectively.

CBRC official Xiao Yuanqi said that these figures indicate the Chinese banking sector is in strong enough health to avert hazard.

“Chinese banks’ capital adequacy ratio is higher than the international minimum standard by two to three percentage points, meaning there is enough ammunition to fend off risks,” said Xiao.

Bank have long played a dominant role in the Chinese financial sector, and traditionally operated at the behest of the central government. This has led to a disproportionate volume of credit flowing towards less efficient state-owned enterprises.

Chinese banks have also assumed greater prominence internationally, with four of them making the Financial Stability Board’s list of 30 global systemically important banks in 2017, including Bank of China and China Construction Bank.

In 2017 seven more Chinese banks joined the list of the world’s top 1,000 lenders published by UK finance magazine The Banker, bringing the total to 126.

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