What is an impaired loan?
The provision for impairment of entrusted loans refers to the measurement of the principal or recoverable amount of entrusted loans at the end of the period, and the provision for impairment of entrusted loans is accrued for the difference between the recoverable amount and the principal. On the balance sheet, the net amount of principal and interest receivable of entrusted loans after deducting impairment reserve shall be incorporated into short-term investment or long-term debt investment projects.
China Commercial Bank still adopts the five-level classification of loans when drawing specific impairment reserves:
1, focus on loans
For the normal and concerned loans in corporate loans, the Bank first calculates the loan proportion transferred to subprime loans as the loan default rate, then multiplies it by the loss given default of subprime loans as the expected loss rate, and finally calculates the portfolio impairment reserve according to this ratio.
2. Subprime and doubtful loans
Commercial banks will adopt a single test method when calculating the loan impairment reserve above the main loan standard of bill of lading; For subprime and doubtful loans below the standard of a single major loan, the combined impairment provision is generally withdrawn according to the weighted average proportion of their respective individual assessment provisions.
3. Loss loans
For loss-making loans, the full reserve can be withdrawn according to the ratio of 100%.
Loan impairment reserve ratio
According to the relevant provisions of the Guidelines for Provision for Loan Losses, the year-end balance of general provision is not less than 65,438+0% of the year-end loan balance; The interest-related loan ratio is 2%; 25% of subprime loans; The proportion of suspicious loans is 50%; The provision rate for loss loans is 100%. (The provision rate for subprime and doubtful loans can fluctuate by 20%).
What subject is the loan damaged?
What does loan loss provision mean?
The loan loss reserve belongs to the asset category, and the loan loss impairment reserve drawn by the accounting bank according to the regulations is not included, and the entrusted loan that the bank does not bear the risk is not included.
Assets for loan loss provision include: discount funds, borrowing funds, customer loans, credit card overdrafts, agreed overdrafts, trade financing, syndicated loans, refinancing and advances.