The China Banking Regulatory Commission said that Chinese banks face an uphill task of reducing non-performing loans. CBRC’s Chairman Liu Mingkang called for concerted effort on the part of Chinese banks to match up to their global peers. MingKang further said that Chinese banks lag far behind other international banks in terms of internal control systems. China banks’ NPL declined to 8.9% of loans last year, from 13.21% at end of the previous yearly. The decline is attributed partly to the Industrial & Commercial Bank of China transferring a major chunk of bad loans to an asset management firm and used an infusion of state capital to write down other loans. Mingkang said that although capital injections and loan write-offs had strengthened the balance sheets of banks, the pressure of a rebound in non-performing loans looms large.
