Commercial banks’ NPL ratio moves higher in Q4
Regulator will give high priority to financial risk prevention and control
banking supervision andmanagement on Tuesday, CBRC Chairman Shang Fulin said the regulator will give higher priority to financial risk prevention and control in 2017.
Shang said it will stick firmly to its baseline of preventing systemic risk and solidly push forward risk prevention and control in key areas, as well as tightly controlling NPL risks.
The CBRC said it will refine the classification of credit assets, intensify the screening of hidden risks, tightly control the increase of risks and strictly manage the power of approval at different levels.
The commission said it will restrain companies from escaping and revoking debts and strengthen cooperation and information sharing with local government and legal departments.
It added that it will also step up punishment of discredited companies and company owners, strictly control risks in local government financing vehicles, and press forward with a campaign to tackle peer-to-peer lending risks and telecom fraud.
“In the short and mediumterm, Chinese industries with excess capacity will continue reducing capacity and stocks,” said Wen Bin, principal researcher at ChinaMinsheng Banking Corp Ltd.
“Companies on the brink of bankruptcy, known as ‘zombie companies’, will exit from the market. These will bring further pressure to banks with regard to nonperforming loans, but the risk is generally controllable.”
In 2016, banks expanded channels and innovated measures for NPL disposal by having trial programs on nonperforming asset securitization and debt-to-equity swaps.
Wen said additionally, banks will control the increase in their NPLs by adjusting their credit structure — making different credit policies for different clients, sectors and regions based on China’s industrial policies.
Overall, the banking sector operated steadily last year.
Data from the CBRC showed net profits for the year rose by 4 percent to 2 trillion yuan ($289.8 billion).