SHANGHAI - Foreign-funded banks based in Shanghai last year recorded the lowest bad loan rate in five years, according to the local banking regulator.

By the end of last year, the bad loan rate of these banks was 0.34 percent, the lowest in five years, according to the Shanghai Bureau of the China Banking Regulatory Commission (CBRC).

Total assets of the banks reached 1.56 trillion yuan ($246 billion) as of the end of 2017, up 13 percent year-on-year. The growth was the fastest over the past five years.

In addition, the assets of the foreign banks in Shanghai accounted for 10.6 percent of the local banking industry's total, the largest share in two years.

While urging local banks to intensify risk control efforts, the CBRC Shanghai Bureau demanded foreign-funded banks work to better serve the real economy by stepping up cooperation.

The CBRC has cut red tape for foreign banks. It has revised rules for foreign banks, scrapping approval procedures for four items including overseas wealth management products and portfolio investment funds. Banks only need to report their services to authorities rather than obtaining approval in advance.

Procedures were also simplified for foreign lenders to set up new branches, appoint executives and issue bonds.

The new policies became effective on Feb 13.