Date
24 September 2017
Shang Fulin has issued a fresh call for tighter risk management at Chinese banks. Photo: Bloomberg
Shang Fulin has issued a fresh call for tighter risk management at Chinese banks. Photo: Bloomberg

China regulator warns of credit risks as bad loans rise

China’s banking regulator has warned of credit risks amid rising non-performing loans (NPLs) of mainland lenders, and issued a fresh reminder to financial institutions to strengthen their controls.

The Shanghai Securities News quoted China Banking Regulatory Commission (CBRC) chairman Shang Fulin as saying that banks must beef up their management and control on both NPLs and NPL ratios.

Attention should be paid to exposure to local government-backed financing vehicles, property loans and non-standard debts, the regulator said.

Some banks have seen their NPL ratios top 1 percent in the first quarter, according to the paper.

Lenders should take a differentiated approach on granting loans, the regulator said, adding that an across-the-board lending suspension that ruptures enterprises’ cash flows must be avoided.

Meanwhile, the CBRC also emphasized risks related to excessive credit lines and mutual guarantees, according to the report.

– Contact HKEJ at [email protected]

KZ/AC/RC

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