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3 major state-owned banks: NPL risks are under control
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16:04, July 28, 2009

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Banking regulator: ensure loans enter real economy

China's state-owned banks shift focus to credit control and restructuring

State-owned commercial banks issued larger loans to SMEs in H1

In the first half of 2009, various types of new renminbi loans totaled 7.37 trillion yuan, an increase of 4.92 trillion yuan year-on-year. Huge loans have contributed much to stabilizing the economy, but potential risks have also accumulated in the high-speed lending. Regarding potential risks of non-performing loans (NPLs) caused by large loans, the Bank of China (BOC), the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC) all said that the risks are under control.

Officers from ICBC said in the first quarter, ICBC extended 636.4 billion yuan in various types of new loans, an increase of 457.7 billion yuan year-on-year, attempting to ease the shortage of funding throughout society.

However, in the second quarter, as China's economy showed signs of stability, ICBC accordingly started to adjust the pace of lending to keep stable growth in loans and prevent dramatic changes in lending. This move has guaranteed the efficiency and effectiveness of loans in the real economy.

Wang Zhaowen, BOC's spokesperson, said that the fast growth in BOC's lending has the prerequisite that relevant risks are controllable. Statistics show that in the first half of 2009, the amount of its non-performing loans (NPLs) dropped by 11.5 billion yuan from the beginning of the year, and the NPL ratio dropped by 1.4 percentage points over the same period.

Zhang Yun, President of ABC, said that in the first half, the bank made more management efforts to recover NPLs, taking back loan principal and interest totaling 22 billion yuan in cash. Both the amount and the ratio of NPLs have dropped, representing remarkable risk resistance capabilities.

By People's Daily Online

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