Bankers say NPLs are sector's top risk

More than 60 percent of Chinese bankers highlighted concentrated outbreaks of nonperforming loans as the top risk facing the banking sector, and 52 percent of the bankers said they would pay close attention to risks associated with local government debt, according to a latest survey.

The bankers revealed their top risk concerns as the quality of credit assets began to stabilize. Data released by the China Banking and Insurance Regulatory Commission on Monday showed that the balance of Chinese commercial banks' nonperforming loans declined by 6.8 billion yuan ($1.02 billion) quarter-on-quarter to 2.03 trillion yuan at the end of the fourth quarter of 2018, and the NPL ratio dropped by 4 basis points to 1.83 percent.

Nearly 64 percent of the bankers forecast that the NPL ratio is likely to increase, according to a survey jointly issued on Tuesday by the China Banking Association and PwC. The survey was conducted in 31 provincial-level administrative divisions last year, recovering 2,380 valid questionnaires from various banking institutions.