Falling NPL ratio

The NPL ratio had dropped by 0.28 percentage points from the end of 2009 to 1.22 percent at the end of June this year. In breakdown, the NPL ratio for corporate loans dropped by 0.37 percentage points to 1.34 percent. The NPL ratio for personal loans decreased by 0.08 percentage points to 0.58 percent. The NPL ratio for overseas operations remained stable as a result of strengthened risk management of overseas business.

The proportion of special mention loans dropped to 3.92 percent by this June, down 0.25 percentage points over the end of 2009.

In response to the complex macro-economic situation this year, CCB said it had stepped up adjustments to its credit structure and introduced surveillance mechanisms for key risk areas in accordance with regulatory requirements to actively prevent and mitigate risks.

Post-lending management was reinforced with the launch of the " post-lending management year" campaign, and it also expedited disposal of NPLs, said the statement.

Outlook in H2

Over the outlook in the second half this year, Zhang said the complexity and uncertainty in global economy would continue to affect China's economic development, but overall the Chinese economy would keep recovery on the right track.

Consumption, investment and exports will push economic growth together with enhanced coordination, he said.

But Zhang warned that the tasks were still tough for managing inflation expectation, maintaining stable and reasonably rapid economic growth, adjusting economic structure and changing economic development pattern.

With it, Zhang said CCB would "certainly witness both opportunities and challenges".

On the one hand, the change in China's development patterns and adjustment in economic structure will facilitate adjustments in CCB's credit structure.

The environment for comprehensive operations will loosen, providing excellent opportunities for nurturing new types of businesses. The progress in the liberalization of interest rate and exchange rate provides larger room for financial innovations. Pricing capabilities will be enhanced with increased effective credit demand.

On the other hand, given the tight market liquidity and volatile capital market,deposit expansion will be more difficult. And the pressures from regulation monitoring and peer competition set higher demand for management capabilities, he said.

Zhang said CCB would consider both current operations and long-term development, reinforce fundamental management with tighter risk management and internal controls, reasonably control loan growth, vigorously promote innovations in products and services, and proactively implement various initiatives.

(Xinhua News Agency August 23, 2010)