CHINESE banks reported a weighted average core capital adequacy ratio of 10.1 percent at the end of June, up slightly from 10 percent at the end of March, the country’s top banking regulator said Friday.

    Chinese banks have set aside an outstanding amount of 1.82 trillion yuan (US$296.1 billion) provisions for possible loan losses at the end of the second quarter, bringing the provision coverage ratio to 262.9 percent, down from 273 percent at the end of March.

    “The Chinese banking sector posted a relatively stable performance in the second quarter, with the nonperforming loan ratio capped at a relatively low level,” the China Banking Regulatory Commission (CBRC) said in a statement on its website.

    It also added that loan-to-deposit ratio for Chinese lenders stood at 65 percent at the end of June, compared with the official cap of 75 percent.

    China’s biggest lenders are poised to exit an era of double-digit profit growth as interest rate deregulation boosts competition for deposits and analysts forecast the nation’s weakest annual economic expansion since 1990.

    A slump in the property market, overcapacity in industries such as steelmaking, and government efforts to curb shadow banking threaten to trigger more bad loans.

    Banks’ combined net income rose 14 percent to 858.3 billion yuan in the first six months from a year earlier, according to the CBRC data. That compared with a 13.8 percent gain in the first half of last year. Bank of China Ltd. will be the first of the nation’s biggest banks to report second-quarter earnings Tuesday.

    CBRC Chairman Shang Fulin last month urged lenders to make adequate provisions and increase write-offs. The banking regulator requires lenders to maintain provisions of at least 150 percent of the value of soured debt or 2.5 percent of total credit, whichever is higher.

    (SD-Agencies)