China's commercial banks will see their bad loan ratio remain generally stable and slightly retreat in the coming quarters, a report released by China Orient Asset Management predicts.

In the fourth quarter of 2016, Chinese lenders' non-performing loan ratio declined for the first time since 2012 to 1.74 percent, suggesting that loan losses posing risks to the country's financial market are easing.

The ratio stood unchanged in the first three months of 2017.

Citing results from sample surveys and data analysis, the report concluded that the banks' bad loan ratio would remain stable from the second quarter of 2017 to the first quarter next year.

But as China pushes ahead with economic structural upgrades, the ratio would still face upward pressure, the report added.

China Orient Asset Management is one of the country's four asset management companies set up in 1999 to deal with the toxic assets of state-owned banks in a bid to help them transform to market-oriented financial institutions.