While problem loans are still at a "very high level," the bank's loss narrowed and its capitalization ratio inched up from the previous quarter, he said.
The banking system is soundly capitalised, it has only limited exposure to sub-prime related assets, and it continues to record strong profitability and has low levels or problem loans.
And approval of renewals or modifications of problem loans by moving forward payment dates or funding new loans to borrowers and using proceeds to pay down prior loans.
Even if a severe correction resulted in problem loans, the nation's big national banks would be able to manage without having to resort to government help, he said.