Chinese banks should brace for bad loans: CBIRC

Outstanding non-performing loans totalled $514b in end-June.

The Chinese banking sector should be ready for a surge in bad loans due to the pandemic-induced economic plan, reports Reuters.

The China Banking and Insurance Regulatory Commission (CBIRC) said that some banks’ profit growth would slow sharply whilst others will see profit declines. The deterioration of asset quality at some small and mid-sized financial institutions were accelerating, the regulator noted.

If banks were to make the minimum amount of provisions for their non-performing loans, which some have yet to do, profits for the sector would fall by more than $50b (CNY350b), the regulator added.

Outstanding non-performing loans in the sector totalled $514b (CNY3.6t) as of end-June, whilst the bad loan ratio rose 0.08pp to 2.10%, CBIRC said.

Small firms have been allowed to delay loan and interest payments and the central government has called on the country’s financial institutions to sacrifice $214b (CNY1.5t) in profits this year to help counter the economic impact of the virus on companies.

Here's more from Reuters.

Also Read

Malaysia's private sector credit grows 5.4% in April

Hong Kong mortgage loans drawdown rises by 9.9%

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit

Top News

What is Lorem Ipsum?

What is Lorem Ipsum? Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

Evergreen Group obtains financing license to expand in Malaysia