Bad Debt of Chinese Banks Hit 2.41 Trillion Yuan at End of Q4 2019, Holds Steady with Q3

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China’s top banking authority has just released its latest raft of data the performance of the Chinese banking system.

As of the end of the fourth quarter of 2019 the NPL balance of Chinese commercial banks stood at 2.41 trillion yuan, according to figures released by the China Banking and Insurance Regulatory Commission (CBIRC) on the evening of 17 February.

The figure marks an increase of 46.3 billion yuan compared to the end of the preceding quarter.

The NPL ratio of commercial banks in China stood at 1.86% as of the end of the fourth quarter, in line with the reading for the end of the previous quarter.

The normal loan balance of Chinese commercial banks was 127.2 trillion yuan at the end of 2019, including 123.5 trillion yuan in normal loans and 3.8 trillion yuan in special-mentioned loans.

Net profits of Chinese commercial banks were 2.0 trillion yuan in 2019, for an average rate of return on capital of of 10.96%, and an average rate of return on assets of 0.87%.

CBIRC data further indicates that the domestic and foreign currency assets of China’s banking sector financial institutions stood at 290 trillion yuan as of the end of the fourth quarter, for a YoY rise of 8.1%.

Assets of large-scale commercial banks rose 8.3% YoY to reach 116.8 trillion, accounting for 40.3% of the total.

Joint-stock commercial bank assets rose 10.1% YoY to reach 51.8 trillion yuan, accounting for 17.9% of the total.

The core tier-1 capital adequacy ratio of Chinese commercial banks was 10.92% at the end of the fourth quarter, for a rise of 0.08 percentage points compared to the preceding quarter.

The tier-1 capital adequacy ratio was 11.95%, for a rise of 0.11 percentage points, while the capital adequacy ratio was 14.64%, for a rise of 0.10 percentage points.

The liquidity coverage ratio of Chinese commercial banks was 146.63% as of the end of the fourth quarter, for a rise of 9.34 percentage points compared to the preceding quarter.

The liquidity ratio was 58.46%, for a rise of 1.44 percentage points compared to the preceding quarter, while the renminbi excess reserve ratio was 2.61%, for a rise of 0.65 percentage points.

The deposit-loan ratio (onshore renminbi) was 75.40%, for a rise of 1.04 percentage points.

Lending by banking-sector financial institutions in China to micro-and-small enterprises was 36.9 trillion yuan as of the end of 2019, including 11.7 trillion yuan in financial inclusion loans of under 10 million yuan, for an increase of 24.6% compared to the start of 2019.

As of the end of the fourth quarter of 2019 the total assets of insurers was 20.6 trillion yuan, for an increase of 2.2 trillion yuan, or 12.2%, compared to the start of 2019.

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