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Non-performing Rate Lowest in History
China's largest commercial bank's credit assets quality improved markedly during the first six months of this year, according to bank President Jiang Jianqing, as is reported by Business Weekly.
Jiang said the use of stringent management and loan procedures led to the improvement.
During the first six months this year, renminbi loans granted by the Industrial and Commercial Bank of China (ICBC), the country's largest State-owned commercial bank, increased by a record 165.6 billion yuan (US$19.95 billion), up 71.4 billion yuan (US$8.6 billion) from last year's period.
"The quality of the new loans was quite good with only 0.66 per cent of them non-performing, the lowest in ICBC's history," said Jiang at the bank's mid-year national conference.
Most new loans have been in profitable categories and were made to high quality clients. In the consumer credit category, the non-performing loan ratio, although unstated, was reported to be acceptably low. Consumer loans were 21.8 per cent of all new loans approved during the first half of this year, a 6-percentage-point increase over last year period.
Ninety per cent of the bank's newly increased working capital went to clients with the highest credit ratings, a 3-percentage-point increase compared to last year'period, he said.
"We have taken advantage of debt-to-equity swaps and non-performing assets transfers to adjust to our new credit management method."
According to Jiang, ICBC has almost finished its non-performing-assets-transfer and debt-equity-swap work. By the end of June, 342.7 billion yuan (US$41.3 billion) in non-performing assets had been transferred to its assets handler, the China Huarong Asset Management Corp.
"We'll co-operate closely with Huarong and try to complete the work sometime in July," Jiang said.
Having escaped the burden of non-performing credit assets, Jiang said the bank will try every means to prevent falling into the mire of new non-performing loans.
It has set up a composite credit management system to directly supervise its 400,000 legal person clients. Formerly, information concerning these clients was managed by local branches, which had given rise to loopholes.
It also introduced the concept of procedural management into its credit work.
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