China’s Non-Performing Loan Ratio Declines 0.06 Percentage Points to 1.92% in 2020, Banks Dispose of Record-breaking 3.02T Yuan in Bad Debt


Official data points to a slight decline in the non-performing loan (NPL) ratio of Chinese banks in 2020, despite the adverse impacts of the COVID-19 pandemic.

The NPL ratio of Chinese banks stood at 1.92% as of the end of 2020, for a decline of 0.06 percentage points compared to the start of the same year, according to data released by the China Banking and Insurance Regulatory Commission (CBIRC) on 22 January.

Chinese banks disposed of 3.02 trillion yuan in NPL’s in 2020, while the NPL balance stood at 3.5 trillion yuan at the end of 2020, for an increase of 281.6 billion yuan compared to the start of the year.

Chinese banks disposed of bad debt by multiple means including clearance, write-offs and transfers, while the 3.02 trillion yuan figure marks a record annual high.

Loan in arrears for more than 90 days comprised 76% of NPL’s, for a decline of 5.1 percentage points compared to the start of the year.

Total assets of the Chinese banking sector were 319.7 trillion yuan as of the end of 2020, for YoY increase of 10.1%, while total liabilities were 293.1 trillion yuan, for a YoY rise of 10.2%.

Renminbi loans increased 19.6 trillion yuan in 2020, 2.8 trillion yuan ahead of the figure for the preceding year.


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