CCB forecasts stability and risk management for 2021

China Construction Bank Corp, a large State-owned commercial lender, disposed of 190.4 billion yuan ($29 billion) of nonperforming loans last year, up 20 percent from 2019. The bank said on Monday the volume of its NPL disposal is expected to remain at the same level this year.

The bank implemented stringent credit grading to proactively identify new nonperforming assets. Its NPL ratio was 1.56 percent last year, rising 0.14 percentage points from a year earlier.

Jin Yanmin, chief risk officer of China Construction Bank, said key indicators show the bank's asset quality still remains stable.

Overdue loans and advances to customers accounted for 1.09 percent of the total for last year, falling from 1.15 percent by the end of 2019. Allowances for impairment losses on loans to NPLs were 213.59 percent last year. The figure, although declining by 14.1 percentage points from 2019, still stayed above 200 percent, according to the bank's announcement of annual results for 2020.

This is a result of the bank's long-term adherence to a steady, prudential, comprehensive and proactive culture of risk management. The bank kept improving risk management technologies and measures and continuously enhanced the capacity of internal management of risk, Jin said.

This year, challenges for risk control remain for the bank. Reviewing its performance last year, investors and analysts found its infrastructure-related NPLs increased slightly. The increase was caused by its rectification of non-standard asset management business and rising risk exposure in some regions due to China's efforts to clear up the implicit risk of local government debt, he said.

"In spite of the pressure, the overall risk of our bank still remains controllable, and our asset quality is expected to remain stable," he said.