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Bank survey shows bankers worried about credit risks 

January 25, 2016

Jiang Xueqing, China Daily

Eighty percent of Chinese bankers polled in a survey said the greatest pressure the Chinese banking sector faced last year was the prevention and control of credit risks and the containment of non-performing assets.

According to a survey jointly released on Sunday by the China Banking Association and PwC, 82.1 percent of bankers said the primary credit risk of their banks remained in the industries with excess capacity, including the industries of iron, steel, cement, and shipping, while 57.6 percent considered the risk of loans to small and micro enterprises as the primary credit risk.

Ba Shusong, chief economist of the association and project leader of the survey, said more than 40 percent of the bankers expect that the non-performing loan ratio will stand between one percent and three percent in the next three years, signifying that risk management has become the top priority of the banking sector.

Statistics from the China Banking Regulatory Commission show that the NPL ratio for commercial lenders jumped 43 basis points year on year to 1.59 percent at the end of September. The outstanding NPLs were 1.19 trillion yuan ($181 billion), up 55 percent from a year earlier.

Wu Weijun, chief partner of PwC Beijing, advised commercial banks to draw as much loan loss provisions as possible to fend off future risks. Read more

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