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THE nonperforming loan ratio of China’s four large
State-owned commercial banks fell by 2.65 percentage points at
the end of June from the end of last year, the central bank
reported Tuesday.
The decline represents a 59.7 billion yuan (US$7.21
billion) reduction in the four banks’ total nonperforming
loans, a statement posted on the Web site of the People’s Bank
of China said.
Paring back the nonperforming loan ratio is part of a
central bank-directed plan to eventually transform the
State-owned banks into shareholding institutions.
The four banks — Industrial & Commercial Bank of
China, Agricultural Bank of China, China Construction Bank and
Bank of China — have been instructed by the central bank to
reduce their bad loan ratios to 15 percent by 2005.
China’s central bank previously announced the four banks’
nonperforming loan ratio stood at 24.54 percent at the end of
April.
The accumulated bad loans are a legacy of decades of
State-directed policy lending to loss-making State-owned
enterprises.
Clearing their balance sheets of these loans is regarded
as a major step toward putting the banks on a more
market-driven commercial footing.
Total lending by the four banks swelled by 533.9 billion
yuan during the first eight months of this year, the central
bank’s statement said.
At the end of August, total loans rose by 171.2 billion
yuan compared with the same period last year.
Local currency lending increased by 510.7 billion yuan
during the eight-month period, representing a 124.2 billion
yuan year-on-year rise in yuan lending at the end of August.
Foreign currency lending increased by US$2.8 billion
during the eight months, representing a US$5.7 billion
year-on-year increase at end-August.
This year’s increase in foreign currency lending
represents a turnaround in the 1998-2001 decline reported by
the four major banks, the statement said.
China’s central bank has forecast total lending by the
four State-owned commercial banks to increase by 730 billion
yuan this year.
(SD-Agencies)
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