In 2006, China's banking industry had a rapid development. By the end of 2006, the total assets of china’s banking industry financial institution reached 43.95 trillion yuan, with a growth of 17.3% than the previous year, the total assets of state-owned banks were 22.54 trillion yuan, accounted for 51.3%, the total assets of joint-stock commercial banks were 7.14 trillion yuan, accounted for 16.2%, the total assets of urban commercial banks were 2.59 trillion yuan, accounted for 5.9%; Other type of financial institution's total assets were 11.68 trillion yuan, accounted for 26.6%.

The bad loans of commercial banks withstand rebound pressure, four consecutive quarters had comprehensive "double down". At the end of 2006, the total bad loans of commercial banks in the territory (including state-owned commercial banks, joint-stock commercial banks and city commercial banks, rural commercial banks and foreign banks) were 1.25 trillion yuan, reduced 71.31 billion yuan compared with the beginning of the year, the rate of bad loans was 7.1%, reduced 1.5 percentage points compared with the beginning of the year. Within this total, the bad loan balance of state-owned commercial banks were 1.05 trillion yuan, reduced 18.85 billion yuan compared with the beginning of the year, the rate of bad loans was 9.2%, reduced 1.3% compared with the beginning of the year. The bad loan balance of Joint-stock commercial banks were 116.81 billion yuan, reduced 30.48 billion yuan compared with the beginning of the year, the rate of bad loans was 2.8%, reduced 1.4% compared with the beginning of the year. The bad loan balance of Urban commercial banks were 65.47 billion yuan, reduced 19.61 billion yuan compared with the beginning of the year, the rate of bad loans was 4.8%, reduced 3.0% compared with the beginning of the year. The bad loan balance of rural commercial banks were 15.36 billion yuan, reduced 2.34  billion yuan compared with the beginning of the year, the rate of bad loans was 5.9%, reduced 2.4% compared with the beginning of the year. The bad loan balance of Foreign banks were 3.79 billion yuan, reduced 30 million yuan compared with the beginning of the year, the rate of bad loans was 0.8%, reduced 0.3% compared with the beginning of the year.

China's banking industry's health was further improved. By the end of 2006, the banks whose capital adequacy ratio met the standards reached 100, with an increase of 47, rate up to standards was 66.7%, and the banks’ assets whose capital adequacy ratio met the standards accounted for 77.4% of the commercial banks’ total assets, with an increase of 2.3% than the end of 2005. Meanwhile, the conducts of banking financial institutions were more prudent, the gaps of loan loss reserve further narrowed, risk-resisting ability obviously improved. At the end of December, loan loss reserve gaps of the main commercial bank were 454.7 billion yuan, decreased 148.4 billion yuan than the beginning of the year, reserve crediting rate was 41.7%, increased 18% than the beginning of the year.

Risk status of urban commercial banks significantly improved. By the end of December 2006, over 59 urban commercial banks had replaced and eliminated bad assets 68.505 billion yuan, in which credit assets were 51.109 billion yuan, the non-credit assets were 17.397 billion yuan. Average ratio of bad loans of china’s urban commercial banks from before the China Banking Regulatory Commission formation’s 24% declined to the current’s 6%, the average capital adequacy ratio from before the China Banking Regulatory Commission formation’s -2% rose to the current’s 6.5%. From the distribution of bank, the disposal effect of non-performing assets of urban commercial banks in Zhengzhou, Dalian, Shenyang, Wuhan, Changchun obviously improved, total disposed sum was 21.947 billion yuan, accounted for 32.04% of the total disposal non-performing assets. The added capital of urban commercial banks in Guangzhou, Lanzhou, Chengdu, Hengyang, Kaifeng were large, total amounted to 4.664 billion yuan, accounted for 47.69% of the total injected capital.

The reform of State-owned commercial bank has achieved a breakthrough. In 2006, in the global capital markets, the record of IPO (initial public offerings) was set by China's state-owned commercial banks again and again. June 1, 2006, the Bank of China listed in Hong Kong, raised 86.7 billion Hong Kong dollars, became the world's largest IPO nearly six years. 34 days later, the Bank of China, "return to" A-share market, raised 20 billion yuan. October 27, 2006, the Industrial and Commercial Bank of China in Hong Kong and Shanghai simultaneously entered the capital market, its H shares and A shares financing 124.9 billion Hong Kong dollar and 46.4 billion yuan respectively, So far as the world's largest IPO.

In addition to the financial restructuring, listing on the market and other aspects’ welcome changes, the Bank of China and the Industrial and Commercial Bank of China had some welcome changes at the establishment of modern banking system. General meeting of shareholders, board of directors, board of supervisors and management formed harmonious operation, a mechanism with fine interaction and balances initial formed; When the party committee played the core political leadership role, protected the institutions stability and enhanced cohesion, It is not a substitute for the Board or management’s duties, it did not affect the statutory decision-making process. In 2006, the corporate governance of state-owned banks was gradually from "resemblance" to "realistic". In addition, several banks have established development strategy with difference competition; Strengthened internal control mechanisms; Spared no efforts to create a "process banks". Accelerated the pace of business innovation; continuous deepened the cooperation with strategic investors.

Small and medium-sized commercial banks promoted reform step. In 2006, the country's 30 provinces, autonomous regions and municipalities all carried through pilot reform of rural credit cooperatives; In addition, it also carried through the reform of Postal Savings system, established the China Postal Savings Bank. Postal savings no longer the fund "pump" which keep the loan funds not, it will become the fund "diversion channel" which use credit to support agriculture.