Chinese Banks' NPL Ratio Drops to 1.30%Chinese Banks' NPL Ratio Drops to 1.30%

BEIJING, July 22 -- The bad loan ratio at Chinese banks fell to 1.30 percent at the end of June, the top banking regulator said on Thursday, marking a slight dip from 1.33 percent at the end of May.

The ratio was down from 1.58 percent at the start of this year.

Outstanding bad loans at all Chinese banks reached 454.9 billion yuan at the end of June, falling from 497.4 billion yuan at the start of this year, the China Banking Regulatory Commission said in a statement on its website.

Chinese banks made provisions equal to 186 percent of non-performing loans at the end of June, up from 178.2 percent at the end of May, the statement added.

The regulator said that the total assets of Chinese banks denominated in both yuan and foreign currencies rose 18.3 percent from a year earlier to 87.2 trillion yuan by the end of the second quarter.

Chinese banks made a record 9.6 trillion yuan in new loans last year, fanning concerns that they were sowing the seeds of a new crop of bad loans down the road. The pace of lending has slown considerably this year, but there are also worrying signs that banks have partly achieved that by shifting loans off their balance sheets.

The CBRC has been pressing lenders to increase provisions and to boost their capital.