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City Commercial Banks Post Decline in NPL
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China's banking regulator said Monday the nation's city commercial banks saw their average non-performing loans ratio down to 7.73 percent by the end of 2005.


Though the ratio remains higher than the one percent to two percent level reported by leading foreign banks, it is a drop of nearly four percentage points from a year earlier. It is also the first time the rate fell below 10 percent, the China Banking Regulatory Commission (CBRC) said in a statement.


City commercial banks, which have long been confined to providing financial services in their locals, witnessed a business breakthrough as the CBRC gave the nod to the Shanghai Bank to open a branch in Ningbo, a coastal city in neighboring Zhejiang Province, last November.


Restructuring and share offerings have also been in the works, as China must overhaul its debt-laden banking system prior to opening the domestic banking market to foreign banks by the end of this year.


Over the past decade, the "big four" state-owned banks, which issued a mountain of government-ordered loans, have received an injection of billions of dollars from the government to shore up their balance sheets.


The country's 118 city commercial banks earned more than 12 billion yuan last year, up 38 percent, or 3.3 billion yuan more than that in 2004, the CBRC said.


(Xinhua News Agency June 6, 2006)

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