Because the loans of commercial banks account for the largest proportion of their assets, the quality of loans not only affects their own security at the micro level, but also has a great impact on the normal operation of a country's financial system and even the national economy at the macro level. Therefore, the risk management that commercial banks first emphasize is the management of their loan quality, that is, the management of credit risk.

In order to control the credit risk, the People's Bank of China stipulates that the proportion of non-performing loans shall not be higher than 15%. The lower the proportion of non-performing loans, the higher the loan quality of commercial banks and the higher the level of credit risk control; At the same time, it reflects that commercial banks have good liquidity and high profitability.

Extended information non-performing loans refer to loans that have been defaulted. Generally speaking, if the borrower fails to repay the principal and interest within three months, the loan will be regarded as a non-performing loan. When banks determine that non-performing loans cannot be recovered, they should write off these loans from profits. When overdue loans cannot be recovered but have not been determined, the provision for bad debt losses shall be listed on the books.

In fact, people can see from the sources of credit funds of national banks that the proportion of self-owned funds in the sources of credit funds of state-owned banks is very small.

The national bank's money mainly comes from deposits, which account for about 60% of the national bank's credit sources, and more than half of the deposits are savings deposits, accounting for about one-third of the national bank's credit sources. The money of China banks is mainly depositors' money, while the assets of state-owned banks are mainly "private" rather than "public".

Bank of China mainly issues loans with depositors' money. A bank is just a "pool of funds". On the one hand, as a debtor to receive money from depositors, on the other hand, as a creditor to lend money to borrowers. In this sense, it is irresponsible for depositors to provide loans to customers who should not lend, and it can even be said to be a crime against depositors.

Baidu Encyclopedia-Asset Quality Ratio