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Assets Quality of Chinese Banking Business Is Hopeful of Improvement
The loan structure of Chinese commercial banks is experiencing great change, and the banking asset quality is expected to be improved, said Yi Gang, deputy Secretary-general of the Monetary Policy Committee of People's Bank of China, which is China's central bank.
In the first nine months of this year, the loans offered by various financial institutions across China saw an increase of 300 billion yuan over last year's same period. Regarding this, Yi Gang said: "It should be noted that the increase in demand for loans stems from within the banks themselves, not from the guidance given by the central bank." He pointed out that among the newly increased loans, the housing loans have increased over 100 billion yuan, so that the total amount of housing loans has reached 260 billion yuan. At the same time, consumption credits, auto credits and loans to students all have seen huge growth. It's thus clear that the growing loans offered to individuals and families have become a new growth point in the issuance of loans by commercial banks.
Yi said that China presently has nearly 10,000 billion yuan loans and the proportion of personal consumption loans to the balance of loans is expected to rise from last year's 1.5 percent to 3.5 percent. Consumption credits are possibly to become high quality assets of Chinese banking business.
In Yi's opinion, at present, there is a certain necessity for the continued rise in the proportion of non-performing assets of the bank, which is likely to have reached the highest point. For a period of time to come, Chinese banking will tide over the stage of high risk and the rising proportion of non-performing assets and enter into a sound cycle.
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