Baku. 12 January. REPORT.AZ/ China's banking regulator said on Monday that new non-performing loans (NPL) held by Chinese banks more than doubled in 2015 from the previous year, according to two people with direct knowledge of the matter.
Report informs, the people, who declined to be identified as they are not allowed to speak to the media, told Reuters the regulator said at a government work conference that total NPLs reached 1.95 trillion yuan ($296.8 billion) in 2015, while net profit grew at a slower pace of 2.3 percent from the year before.
The NPLs in China's banking sector increased 257.4 billion yuan ($39.2 billion) to 1.43 trillion yuan during 2014, suggesting that new NPLs last year surged more than 500 billion yuan, according to data from the China Banking Regulatory Commission (CBRC).
"At the end of 2015, commercial bank non-performing loans increased for 17 consecutive quarters, and the non-performing loans increased for 10 consecutive quarters," Shang Fulin, chairman of the CBRC, told the 2016 national work conference on banking supervision on Monday, according to the two sources.
Chinese banks are often accused of under reporting their non-performing loans by using methods such as re-financing unprofitable state-owned enterprises and under recognizing overdue debt to muddy the numbers.
Shang pointed out that as China's economic growth slowed to around 7 percent last year from 9.5 percent in 2011, banking profit growth plummeted to 2.3 percent from 39.5 percent over the same period in 2014.