Chinese banks see growth in green credit balance in first 9 months

China's 21 major banking institutions had 14.08 trillion yuan ($2.21 trillion) in green credit outstanding by the end of September, up more than 21 percent from the beginning of the year, China Securities Journal reported on Tuesday, quoting data from the China Banking and Insurance Regulatory Commission.

The overall asset quality of green credit is good, and the non-performing loan ratio in the past five years has remained below 0.7 percent, far lower than the overall non-performing level of all loans in the same period.

A number of banks declared they would increase their credit input in the green and low-carbon transformation field. China Development Bank recently proposed that by 2025, its green loans will account for more than 5 percent of its credit assets compared with the end of 2020. By 2030, green loans will account for about 30 percent of their credit assets.

Bank of China will provide no less than 1 trillion yuan in financial support to green industries during the 14th Five-Year Plan period, and the proportion of green credit will increase year by year. At the same time, the bank will accelerate the adjustment of the credit structure of the industry, strengthen credit balance control of industries with high energy consumption and high emissions, and increase credit support for green projects such as emission reduction technology upgrading, clean and efficient use of fossil energy, and flexible transformation of coal and electricity.

In recent years, the basic system of green finance has been improved, and green financial instruments have been enriched.

The People's Bank of China, the nation's central bank, included green bonds in evaluating green financing for financial institutes, according to Wang Xin, head of the bank's research bureau.

Wang said PBOC, together with other relevant researching bodies, are formulating instructions on financially supporting green development. This year, the central bank launched new financial products such as carbon neutral bonds and sustainable development bonds.

In addition, the central bank recently launched supportive tools for reducing carbon emissions, an effort to promote the development of clean energy, energy conservation and environmental protection, carbon emission reduction technology in a targeted and direct way, leveraging more private funds to promote carbon emissions reduction, Wang added.

Representative of the China Banking and Insurance Regulatory Commission also said they will perfect the policy system for green financing, improve green finance regulatory measures, formulate guidelines on green finance information disclosure, and provide guidance for financial institutions to comprehensively measure their carbon footprint and strengthen climate and environmental risk management.