Chinese banks’ bad loans jumped by 39%

Stood at US$69 billion in 2012.

The non-performing loan ratio, however, inched downward by 0.01 percentage point to 0.95%. In January, China's banks loaned out US$172 billion, the largest monthly total in the last three years.

Analysts said the growth in new loans might help keep the NPL ratio at a relatively low level. They also noted that China's bad loans are increasing in scale, but the overall risk is still under control.

They pointed out that since China's macroeconomic condition improved over the past year, the level of China's bad loans and NPL ratio might drop.

The combined net profits of China's commercial banks rose to US$197.5 billion in 2012, up 18.9% year-on-year, said the government. This growth rate, however, was far lower than 2011, which saw a 36.3% increase.

The capital adequacy ratio improved to 13.3% in 2012 from 12.7% year-on-year. The average loan to deposit ratio was 65.3%.

Rising defaults and shrinking loan profitability are a potentially serious threat to China's banking system since expanded at the slowest pace in 13 years.\