China's big four state banks had an average non-performing loan ratio of 16.86 percent at the end of 2003, down 4.71 percentage points from the start of the year, the banking regulator said on Sunday.
The four - Industrial and Commercial Bank of China, Bank of China, China Construction Bank and Agriculture Bank of China - had 1.59 trillion yuan ($192 billion) in bad loans at the end of 2003, the China Banking Regulatory Commission said.
The announcement followed a $45-billion capital injection by the government into the Bank of China and Construction Bank to pave the way for their restructuring and eventual stock listings.
The falling bad loan ratio had "created the foundation and conditions for state-owned commercial banks to conduct joint stock reforms", the commission said in a statement published on its Web site (www.cbrc.gov.cn).
The average bad loan ratio was compiled under the traditional loan-classification standards, the commission said.
Western analysts say decades of lending to loss-making state firms has left the true bad loans ratio close to 40 percent.
China's medium-sized joint stock banks, including listed China Merchants Bank and Minsheng Banking Corp, had cut their average bad loan ratio by three percentage points in 2003 to 6.5 percent, the commission said.
The smaller city commercial banks had cut their average non-performing loan ratio by 4.87 percentage points in 2003 to 12.85 percent, while rural credit co-operatives slashed their bad loan ratio by 7.5 percentage points to 29.72 percent, it said.
The regulator would continue to put pressure on banks to cut bad loans this year to help curb financial risks, it said.
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