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Chinese state lenders keep bad debts under control: newspaper

2019-04-02 11:14

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BEIJING, April 2 (Xinhua) -- Asset quality of China's large state-owned commercial banks remained stable last year as they continued to optimize their credit asset structures and enhance risk management capabilities, China Daily reported Tuesday.

Non-performing loan (NPL) ratio of the banks all fell last year compared with a year earlier.

Industrial and Commercial Bank of China (ICBC), the country's largest commercial lender by assets, dropped 3 basis points year-on-year to 1.52 percent at the end of 2018, falling for eight consecutive quarters, according to the report.

Using big data technology, ICBC built nearly 100 models, using which it established a strong risk monitoring system. The system ensured the bank would not extend total loans in excess of 120 billion yuan (about 17.86 billion U.S. dollars) at the initial stage by strictly examining the client's loan access eligibility, Wang Bairong, chief risk officer of ICBC, was quoted as saying by the paper.

China Construction Bank also adopted stringent risk management and strived to optimize credit asset structure last year. As the end of 2018, its NPL ratio stood at 1.46 percent, down 3 basis points from 2017.

Bank of China continuously strengthened credit risk management, proactively identifying and resolving potential risk, Liu Jiandong, chief risk officer at the bank, was quoted as saying by the paper.

To step up the resolution of non-performing assets, the commercial lender used a combination of measures, including cash collections, restructuring and write-offs.

Agricultural Bank of China saw its NPL ratio down 22 basis points from 2017 to 1.59 percent in 2018, with its balance of NPLs standing at 190 billion yuan, 4.03 billion yuan less from one year earlier.

To achieve high-quality development, banks should promote transition to comprehensive risk management and build strategy-oriented risk management systems based on refined management instruments, while they accelerate the application of financial technology in this area, John Qu, a senior partner at McKinsey, was quoted as saying by the paper.

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