YEREVAN, November 17. / ARKA /. China’s bad loans jumped by the most since 2005 in the third quarter, fueling concern that a cooling economy will be further weakened as banks limit lending to avoid credit risks, vestifinance.ru reported citing Bloomberg.

Nonperforming loans rose by 72.5 billion yuan ($11.8 billion) from the previous quarter to 766.9 billion yuan, the China Banking Regulatory Commission said in a statement on Nov. 15. Soured credit accounted for 1.16 percent of lending, up from 1.08 percent three months earlier.

“We are still suffering from the aftermath of the credit binge and massive stimulus measures put in place in 2008,” said Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp. “Banks have accelerated recognition of their bad loans in the last two quarters so that they could start the clean-up process.”

Still, the pace of debt souring may have reached its peak, Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia, said in a note. He estimated that nonperforming loans at Hong Kong-listed banks will probably increase by 18 percent in 2015, slowing from an estimated 31 percent gain in 2014.

Chinese banks’ combined net income rose 12.7 percent to 1.26 trillion yuan in the first nine months from a year earlier, the CBRC data showed.

Lenders’ bad-loan coverage ratio, a measure of reserves for soured credit, narrowed to 247.2 percent from 262.9 percent in June, the CBRC data showed. Their capital adequacy ratio, a measure of financial strength, increased to 12.9 percent from 12.4 percent three months earlier.-0-