Chinese banks 2010 profits seen up 4.7%

China’s banks are expected to make an aggregate profit of more than US$105 billion in 2010, 4.7% higher than last year, but are also expected to report a significant rise in bad loans, the South China Morning Post reported, citing a senior official’s comments in local media. According to Liu Mingkang, chairman of the China Banking Regulatory Commission, the increase in non-performing loans (NPLs) was a result of the massive amount of new loans issued since last year. Banks reported an NPL ratio of 1.2% by end-September but this figure could be higher by the end of 2010. "As a developing country, a 2% non-performing loan ratio is justified and reasonable for these banks," Liu said. Banks issued US$1.1 trillion in new loans between January and November this year, with total outstanding loans recorded at US$7.56 trillion by end-November.