Dynamic Path Of Chinese State-owned Commercial Bank’s NPL Ratio

As an important indicator of the quality of bank creditNon-performing loans，what is considered to be the main cause of thefinancial crisis by IMF.Gathering a large number of non-performingassets, become a heavy burden of the banking operations anddevelopment, and threaten the security of the entire financial system.NPLratio as the case may be a structural measure of non-performing loans,more objectively, intuitive to show the quality of bank assets.This paper introduces the theory of non-performing loans andnon-performing loan ratio of references to non-performing loan ratio alertanalyzes the current state-owned commercial banks’ bad loan ratio andbinding of non-performing loans of state-owned commercial andnon-performing loan ratio during2003-2013, the theoretical analysis ofthe causes of non-performing loan ratio produced;Secondly, through themodel, from the perspective of optimal control theory, several factorsinfluence the interpretation derived NPL ratio changes (loan amount, thebank’s internal management efforts, the bank non-performing loans, theeconomic growth rate, nominal lending rates, openness and irrationalbehavior of entrepreneurs), qualitative analysis of the different factorsvariable over time effect on non-performing loans.In short, this article attempts to explain these two issues throughresearch methods: the first is the banks’ bad loans is a "financial pollution", the country’s welfare would have a negative effect; second isto reduce non-performing loans of state-owned commercial bank raterequires multifaceted efforts, not only to the need to strengthen the rule oflaw, improving the market economy, but also to improve credit marketsystem, to prevent moral hazard.