The asset quality of China's top 10 listed banks has clearly declined, according to a report released by PricewaterhouseCoopers (PwC) on Tuesday. PwC expects the non-performing loan (NPL) balance to rise in the near future as the gap between the average delinquency ratio and average NPL ratio had widened, as part of a continuing trend for divergence. The NPL ratio grew at a significantly slower pace than the delinquency ratio, the report said. The top 10 listed banks had an NPL balance of 449.4 billion yuan at the end of 2013, up 19.47 percent from the end of 2012. The average NPL ratio increased 0.06 percentage points to 0.99 percent. This across-the-board increase indicates that the slowdown in economic growth is impacting banks, according to PwC. Its report noted a surge in NPLs in the Yangtze River Delta, where the NPL balance surged 30.90 percent over the pervious year. In terms of industry, most corporate NPLs concentrated on manufacturing and retailing. The NPL balance in the real estate fell, PwC analysis showed. But bank loans to the sector have been closely watched for several years and now shadow banking contributes considerably to property developers' financing. "In 2014, the banking sector will continue to face a complex financial environment. Banks should focus on the impacts of interest rate liberalization, Internet finance, deposit insurance, and the entrance of privately owned banks," said Raymond Yung, PwC China financial services leader.