A bank staff member counts RMB and US dollar notes in Nantong, Jiangsu province, on Aug 28, 2019. (Photo: Sipa)

China's banking and insurance sectors will not be hugely affected by global financial market fluctuations but will maintain the momentum of steady and sound development, as the situation of a novel coronavirus outbreak is improving in the country, a financial regulatory official said on Sunday.

In the next stage, China will continue to fight a tough battle preventing financial risks, deepening supply-side structural reform in the financial sector, and promoting high-quality development of the banking and insurance sectors, said Zhou Liang, vice-chairman of the China Banking and Insurance Regulatory Commission.

The commission will step up the effort to dispose of nonperforming loans through multiple measures, handle high-risk financial institutions prudently and appropriately, keep dismantling shadow banking, promote the smooth and healthy development of the housing market, carry forward the regulation of peer-to-peer lending activities, and improve corporate governance of banking and insurance institutions, especially by tightening regulation of equity management of small and medium-sized financial institutions, he said at a news conference held by the State Council Information Office.

During the first two months of this year, China's new yuan loans totaled 4.24 trillion yuan ($597.6 billion), increasing by 130.8 billion yuan year-on-year, according to the People's Bank of China, the central bank.

By the end of February, the nonperforming loan ratio of commercial banks in the country was 2.08 percent, up by 0.06 percentage point from the beginning of this year. The provision coverage ratio of commercial banks stood at 181 percent, and the capital adequacy ratio was 14.6 percent, showing that China's banking and insurance sectors are highly resilient to risks, Zhou said.

Previous measures for financial risk mitigation and institutional reforms have laid a solid ground for China's banking and insurance sectors to handle financial risk challenges amid steady development, he said.

Over the last three years, the domestic banking sector disposed of 5.8 trillion yuan of nonperforming assets and reduced 16 trillion yuan of high-risk businesses including shadow banking and cross-sector financial business. The risk of peer-to-peer lending also declined sharply, while the number of peer-to-peer lending institutions fell by 90 percent during the same period.