Bad loans owed to China's commercial banks dropped by 0.6 percentage point in the first quarter of the year, according to the latest figures from the China Banking Regulatory Commission (CBRC).

By the end of March, commercial banks operating in China, including foreign banks, had 1.31 trillion yuan (about 164 billion U.S. dollars) in bad loans.

Bad loans accounted for 8 percent of the banks' total loans at the end of the first quarter.

The rate of bad loans for China's commercial banks dropped to below one percent for the first time.

Bad loans of state-owned commercial banks totaled 1.06 trillion yuan (133 billion dollars) at the end of March, down by 0.7 percentage point from the beginning of the year.

The rate of bad loans for state-owned commercial banks now stands at 9.8percent, dropping to less than 10 percent for the first time.

CBRC officials warned that bad loans of the commercial banks may bounce back as the government continues to pursue policies aimed at restructuring the economy and cut down on overcapacity in many industries.

Source: Xinhua