China's banking system seems healthy

The China Banking Regulatory Commission (CBRC) reports on the state of China's banking industry in 2011.

Some of the more interesting data:

• Total assets of China's banking and financial institutions amounted to US$17.9 trillion in 2011, up 19% or US$2.9 trillion from 2010. Total assets were equivalent to 239.7% of nominal GDP in 2011. The big commercial banks held 47.3% of total assets.

• Total liabilities amounted to US$16.8 trillion, an increase of US$2.7 trillion or 19% from the previous year. Shareholders’ equity amounted to US$1.1 trillion, up US$222 billion from the previous year.

• Combined profits for China’s banks in 2011 stood at US$198.2 billion, an increase of 39.3%, with ROE of 19.2% and ROA of 1.2%, while loan-to-deposit ratio reached 72.7%.

• Overall capital adequacy for commercial banks reached 12.7% in 2011, an improvement of 55 bps from the previous years. Core capital adequacy reached 10.24%. All banks had their capital adequacy ratio above 8%. 

• Non-performing loans decreased by US$30.2 billion to US$166.5 billion with an NPL ratio of 1.77%, a 66 bps reduction from the previous years. 

• The NPL ratio was 0.96% for commercial banks at the end of 2011, a reduction of 17 bps from the previous year.

• Loan loss reserve increased by US$39 billion to US$188.6 billion in 2011 with provision coverage at 278.1%.