PBOC Advisor – NPL not very high but the NPL ratio could rise

China’s non-performing loans in Q1 2016 hit 11-year high of 1.4 trillion Yuan, or 1.75% of total bank lending, the China Banking Regulatory Commission (CBRC) said in a quarterly report released back in May.

In the second quarter non-performing loans at China's commercial banks increased 45.2 billion Yuan to 1.44 trillion Yuan. This was the smallest increase since end of 2013. Nevertheless, concerns of Non-performing loans have started hitting the wires off late.

PBOC advisor Fan Gang in an interview with Bloomberg tried to calm market nerves by stating non-performing loans (NPL) are not very high but the NPL ratio could reach 5% to 6%.