In fact, it is the extraction ratio of bad debt provision. For example, the proportion of bad debt provision for accounts receivable of listed companies in China is 9%, that is, bad debt provision is made according to 9% of the balance of accounts receivable, and the extracted provision enters the current profit and loss. It is a possible bad debt and bad debt reserve in bank loans, an aspect of bank's prudent screening and risk prevention, and a quantitative indicator reflecting the authenticity of performance. The lower the ratio, the better. The smaller the reaction loss, the higher the profit. The higher the ratio, the greater the risk, the greater the loss and the smaller the profit. The reserve ratio should be adapted to the degree of loan risk, and it should not be too low to lead to insufficient reserves and inflated profits; It can't be too high, which will lead to too much reserve funds and a virtual decline in profits. This indicator reflects the risk degree of bank loans, socio-economic environment, integrity and other aspects from a macro perspective.

Second, what is the provision rate?

Provision refers to the reserve funds reserved in the process of budgeting when the investment is expected to suffer losses. At the same time, it is also a preparation for the risks and losses that may have been constituted in the operation of the enterprise, which can directly reflect the risks and costs borne by the enterprise, directly reduce the net assets, and more truly reflect the operation level and asset quality of the enterprise. The provision budget in the related content account may be different from the final result: if the actual loss is less than the provision budget, it can be regarded as profit, and vice versa. The provision ratio is actually the extraction ratio of bad debts and bad debt reserves. For example, the proportion of bad debt provision for accounts receivable of listed companies in China is 9%, that is, the bad debt provision is withdrawn according to 9% of the balance of accounts receivable, and the withdrawn reserve enters the current profit and loss. The lower the ratio, the better. The smaller the reaction loss, the higher the profit. The higher the ratio, the greater the risk, the greater the loss and the smaller the profit. Because the provision ratio should be suitable for the degree of loan risk, not too low, which will lead to insufficient provision and inflated profits; Nor should it be too high, resulting in excess provision and a virtual decline in profits. Knowledge expansion bank provision refers to bank loan loss provision and bank asset loss provision. Bank provision plays a key role in improving the ability of banks to digest non-performing assets, and its importance can be imagined.

3. What is the supply rate?

Provision coverage ratio, also known as provision coverage ratio, is the ratio of loan loss provision to non-performing loans, that is, the possible utilization rate of bank loans, which mainly reflects the ability of commercial banks to make up for loan losses and prevent loan risks. It is a quantitative indicator used by banks to consider the prevention and control of risks and reflect the authenticity of performance, and it is also an important indicator to measure whether the loan loss reserve of commercial banks is sufficient.

4. What is the supply rate?

The provision rate is the possible provision for bad debts and bad debts of quasi-loans. It is an aspect of bank's careful screening and risk prevention, and it is also a quantitative index reflecting the authenticity of performance. The lower the ratio, the better. The smaller the reaction loss, the higher the profit. The higher the ratio, the greater the risk, the greater the loss and the smaller the profit.

This indicator reflects the risk degree of bank loans, socio-economic environment, integrity and other aspects from a macro perspective. According to the Risk Rating System of Joint-stock Commercial Banks (Provisional), the provision coverage ratio is the ratio of actual loan loss provision to loan loss provision, and the best state of this ratio is 100%. The provision coverage ratio is an important indicator of a bank, which examines whether the bank's finances are controllable.

For some banks, the ratio reaches 150%, which is a more prudent requirement than adequate provision. After the reduction, there are not many reserves.

As can be seen from the bank's income statement, the reserve is deducted from the pre-tax profit as an expense, so if the reserve is reduced, the bank's profit will decrease and the bank will have bad debts.