BEIJING — China's banking sector handled 3.13 trillion yuan (about $492.4 billion) worth of non-performing assets last year, effectively reducing credit risks, official data showed.

The figure saw an increase by 0.11 trillion yuan from a year ago, a record high, according to the China Banking and Insurance Regulatory Commission.

During the 2017-2021 period, China's banks handled 11.9 trillion yuan worth of non-performing assets, which surpassed the aggregate of 12 years prior to the period and served as a key backstop against systemic financial risks, the commission said.

Warning against the possibility of bad loans resurging amid COVID-19 strains and economic headwinds, the commission urged banks to strengthen oversight over the quality of their assets.