Chinese Banks See Bad Loan Ratio Edge Lower in First Half of 2021, Post 1.1T Yuan in Profits

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Official data from the Chinese banking regulator points to a slight decline in the non-performing loan (NPL) ratio for the nation’s lenders at the end of the first half of 2021, alongside robust profit growth in the wake of the COVID-19 pandemic.

Chinese commercial banks saw net profits of 1.1 trillion yuan in first half of 2021, for growth of 11.1% compared to the same period in 2021, according to data released by the China Banking and Insurance Regulatory Commission (CBIRC) on 10 August.

The average return on capital was 10.39% at the end of the first half of 2021, for a decline of 0.89 percentage points compared to the end of the preceding quarter.

The NPL balance of Chinese commercial banks was 2.8 trillion yuan at the end of the first half, for an increase of 2.5 billion yuan compared to the end of the first quarter. The NPL ratio of Chinese commercial banks was 1.76%, for an on-quarter decline of 0.05 percentage points.

The domestic and foreign currency assets of Chinese banking sector financial institutions stood at 336 trillion yuan at the end of the first half of 2021, for YoY growth of 8.6%.

This included 136.2 trillion yuan in assets held by large-scale banks, accounting for 40.5% of the total, and marking YoY growth of 8.1%; as well as 60.3 trillion yuan in assets held by joint-stock banks, accounting for 18.0% of the total, and marking YoY growth of 8.4%.

The provision coverage ratio of commercial banks in China was 193.23% at the end of the first half, for a rise of 6.09 percentage points compared to the end of the first quarter. The capital adequacy ratio was 14.48%, for a decline of 0.03 percentage points.

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