Non-performing loans of banks refer to loans that banks lend to individuals or enterprises, and enterprises can't repay loans for a long time or even for free, which leads to banks' long-term inability to recover funds. When evaluating the quality of bank loans, according to the risk basis, loans are divided into five categories: normal, concerned, secondary, suspicious and loss, among which subprime loans, suspicious loans and loss loans are collectively called non-performing loans.

Subprime loan is defined as the borrower's repayment ability has obvious problems, and it is impossible to repay the loan principal and interest in full by relying entirely on its normal operating income. Even if the guarantee is implemented, it may cause certain losses. The definition of suspicious loan is that the borrower can't repay the loan principal and interest in full, even if the guarantee is implemented, it will definitely cause great losses. Loss loan refers to a loan whose principal and interest cannot be recovered or only a small part can be recovered after all possible measures or all necessary legal procedures are taken. After classifying all kinds of loans, the following three types of loans are classified as non-performing loans. Non-performing loans indicate that banks will suffer risk losses, and minimizing non-performing loans is the primary goal of risk management of commercial banks.

Non-performing loan ratio refers to the proportion of non-performing loans of banks to the total loan balance. The non-performing loan ratio of financial institutions is one of the important indicators to evaluate the security of credit assets of financial institutions, and the non-performing loan ratio of commercial banks should generally not be higher than 5%. The higher the non-performing loan ratio, the greater the proportion of loans that may not be recovered in the total loans; The low rate of non-performing loans means that the proportion of loans that financial institutions can't recover is smaller.

The calculation formula of NPL ratio is as follows: NPL ratio = (subprime loan+doubtful loan+loss loan)/loan × 100%.

= loan provision ratio/provision coverage ratio × 100%

Access to the NPL ratio of local banks: 1. Department of Money and Credit of China People's Bank; 2. Supervision Section of the Banking Regulatory Bureau. Note: The non-performing rate belongs to the internal data of the Bank and will not be disclosed to the public. If you need to obtain it, please bring the relevant official letter for inquiry and ensure the confidentiality of the information.