(Adds detail, comment)
BOAO, China, April 8 China's banks may see their
bad loans rebounding this year due to government efforts to
reduce overcapacity in some industries, Yan Qingmin, a vice
chairman of the China Banking Regulatory Commission (CBRC) said
Yan told reporters at the Boao forum in the tropical island
of Hainan that the average non-performing loan (NPL) ratio of
Chinese banks could still be kept around 1 percent at the end of
2014, as they had set aside enough provisions.
The Shanghai Securities News reported last week that the
CBRC would conduct regional and national stress tests after
banks saw a spike in bad loans last year, reflecting growing
concerns over credit risk.
Chinese banks' NPL ratio rose to 1.0 percent at the end of
December, its highest level in two years, the CBRC reported in
Bankers and analysts expect bad loans to rise further this
year as economic growth slows and banks deal with the aftermath
of a huge lending binge that policymakers unleashed to soften
the impact of the global financial crisis in 2008.
The clash between entrenched interests in China's
traditional finance sector and its internet companies has
escalated in recent weeks, with banks imposing limits on how
much their customers can transfer to online finance services and
the authorities looking into potentially heavy regulation.
"We must appropriately regulate internet finance industry
and in the future we will set a basic or minimum threshold for
the market access. Otherwise, we will see unfair competitions in
the sector," Yan said.
Though small, online and mobile payment transactions in
China have been growing rapidly. The online payment market last
year grew 47 percent to 5.37 trillion yuan ($869.20 billion) in
transactions, according to Beijing-based consultancy iResearch.
Internet companies have also rolled out higher yielding
wealth management products to compete with banks, contributing
to interest rate liberalisation in China.
(Reporting by Aileeng Wang and Kevin Yao; Editing by Clarence
Fernandez and Robert Birsel)