Over a week after first distributing its Nonperforming Loan (NPL) Report that reported China's NPL exposure was estimated at US$911 billion, Ernst & Young Global now says the number is "factually erroneous".
Throughout the report this amount was identified as a potential future amount that includes NPLs totaling approximately US$358 billion for the big four Chinese commercial banks.
Upon further research, Ernst & Young Global says the report did not go through its normal internal review and approval process before it was released to the public.
The official level of NPLs of US$133 billion for the big four commercial banks in China is computed on a regulatory and accounting standard based on objective evidence of impairment.
Ernst & Young China serves as auditors for one of those four commercial banks and their audit, performed under international standards of auditing in order to form an opinion on the bank's state of affairs in accordance with International Financial Reporting Standards, supports the bank's contribution to the total of US$133 billion for all four of the commercial banks.
In a statement, Ernst & Young says, "We apologize that this erroneous report was issued. We sincerely regret any misleading views that the report conveyed."
