Date
21 July 2017
Bank of China has seen its outstanding bad loans rise to 135.8 billion yuan as of end-March. Photo: Reuters
Bank of China has seen its outstanding bad loans rise to 135.8 billion yuan as of end-March. Photo: Reuters

Bank of China NPL coverage ratio falls short of requirement

Bank of China Ltd. (03988.HK) has seen its non-performing loan (NPL) coverage ratio drop below the minimum regulatory requirement of 150 percent, the Hong Kong Economic Journal reported.

The lender’s bad-loan coverage ratio stood at 149.07 percent at the end of March, down from 153.3 percent at the end of last year, the report said.

The breach, however, came at a time when the State Council is said to be considering lowering the threshold.

China Construction Bank Corp. (00939.HK) chairman Wang Hongzhang (王洪章) has been quoted in the media as saying that he considers 120-130 percent to be a more reasonable range for provision ratio.

Bank of China’s NPLs were up 4.9 billion yuan in the first quarter to 135.8 billion yuan. The bad loans represented 1.43 percent of the bank’s outstanding credit. 

The state-controlled lender said it will fine-tune its risk control management to adapt to the new economic and financial environment.

[Chinese version中文版]

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