The health of China's small- and medium-sized commercial banks reached a record high in 2008, the China Banking Regulatory Commission (CBRC) said in a statement Tuesday.

According to the statement, the average capital adequacy ratio was 10.5 percent in joint-stock commercial banks, while city commercial banks achieved an average capital adequacy ratio of 13 percent, as of the end of 2008.

The asset quality and the capability to handle loan losses also improved in small- and medium-sized commercial banks.

Non-performing loans (NPL) ratio in joint-stock banks and city commercial banks in the nation fell to 1.35 percent and 2.3 percent at the end of 2008 respectively.

The provision coverage ratio, a bank's reserves for bad loans against its outstanding non performing loans, in joint-stock banks and city commercial banks rose to 169 percent and 114 percent respectively.

At the same time, fraud cases in small- and medium-sized commercial banks were on the decline.

The number of fraud cases uncovered in joint-stock banks dropped 69 percent in 2008 from a year earlier. And city commercial banks also had 65 percent less fraud cases last year than in 2007.

Shares of the 14 banks listed in Shanghai and Shenzhen surged yesterday.

The Diversified Bank Index, covering 12 listed banks in Shanghai, closed 3.04 percent higher yesterday.

Shares of the two banks listed on the Shenzhen exchange, Bank of Ningbo and Shenzhen Development Bank, rose 2.54 percent and 4.2 percent respectively.

(China Daily March 18, 2009)