China's top banking regulator rated the country's banking industry as healthy with total assets increasing rapidly, bad loan rates dropping and capital adequacy ratio (CAR) rising.

"The performance of Chinese banks has reached a historic peak," said Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission (CBRC), at a financial forum in Beijing on Saturday.

Total banking assets amounted to 59.3 trillion yuan (US$8.68 trillion) by September, said Jiang. The figure had increased more than fourfold from a decade ago during the southeast Asia financial crisis.

Profits after tax of Chinese banks reached 446.7 billion yuan, a 12-fold increase from the 36.4 billion yuan reported in 2002.

"Profits continue to rise rapidly this year," said Jiang without giving specific numbers.

CBRC statistics showed the bad loan rate of major commercial banks had dropped for the sixth consecutive year to 5.5 percent from more than 20 percent in 2002.

"The bad loan rate will go down further after the Agricultural Bank of China (ABC) completes its join-stock transformation reform," said Jiang.

As the last of the four major state-owned commercial banks to be transformed into a joint-stock company, ABC signed an agreement on November 6 with Central Huijin Co., an investment arm of the government, for a 130-billion-yuan capital injection in preparation for an eventual listing.

The bank's non-performing loan rate stood at 23.5 percent by 2007.

At the same time, the CAR of 192 commercial banks nationwide had exceeded 8 percent by the third quarter, the capital accounting for 85 percent of the country's total. Only eight banks met the 8 percent criterion back in 2003.

The CAR is used to track a lender's capacity to tackle financial risks. A bank's CAR should not fall below 8 percent, the minimum standard set by China's central bank.

Jiang said China may have to face a more formidable economic environment with the global financial crisis.

"However, we have strong confidence in our ability to carry out a good job in risk management and control for the banking industry."

(Xinhua News Agency November 17, 2008)