The
Industrial and
Commercial Bank of China (ICBC) yesterday revealed its ratio of
non-performing loans (NPLs) for the first time as Chinese banks
take steps towards opening up now that the country has entered the
World Trade Organization.
By
the internationally accepted five-category loan classification,
NPLs from China's largest commercial bank accounted for 29.8
percent of the total of outstanding loans at the end of last year,
the bank said in a press release.
An
ICBC official said its outstanding loans totaled 2.66 trillion yuan
(US$320 billion) at the end of 2001, virtually putting its NPLs at
792.5 billion yuan (US$95.5 billion).
High NPL ratios are one of the most alarming problems in China's
banking industry, threatening its overall financial security and
impeding key reforms, including listing plans.
Dai Xianglong, governor of the central ,
said earlier this year that 25.37 percent of the loans at the four
biggest State-owned commercial banks were non-performing.
The ICBC said its end-of-2001 NPLs dropped by 39 billion yuan
(US$4.7 billion) from a year earlier and their share in total bank
loans was 4.65 percentage points lower from the end of 2000.
By
Chinese standards, the ICBC's NPL ratio was 25.7 percent of its
total loans, 23.4 billion yuan (US$2.8 billion), or 3.59 percentage
points lower than the end of 2000.
The NPL ratios of new loans stood at 1.1 percent, 0.47 percent and
0.22 percent respectively in the three years since 1999 and part of
its loan products "achieved or approached top quality levels in the
international banking industry," it said.
"The decline in non-performing loans has improved the profitability
of the Industrial and Commercial Bank of China," a spokesman said.
"And the improved profitability is reinforcing its ability to
dissolve non-performing loans."
The bank's profits, to be deducted by bad loan provisions, stood at
34 billion yuan (US$4.1 billion) in 2001, 2.4 times more from a
year earlier.
The figure is predicted to be 40 billion yuan (US$4.8 billion) for
this year.
The spokesman said ICBC aims to bring its NPL ratio, by Chinese
standards, below 30 percent by the end of 2003 and the
five-category NPL ratio, down to 10 percent in five years.
(China
Daily April 26, 2002)