China’s bad loans number highest in a decade
BUSINESS RECORD STAFF Feb 15, 2016 | 4:42 pm
1 min read time
159 wordsAll Latest News, Banking and FinanceSoured loans at Chinese commercial banks rose to the highest level since June 2006 as the nation’s economic expansion slowed to the weakest pace in a quarter century, Bloomberg reported.
Nonperforming loans jumped 51 percent from a year earlier to 1.27 trillion yuan ($196 billion) by December, data from the China Banking Regulatory Commission showed on Monday. The bad-loan ratio climbed to 1.67 percent from 1.25 percent, while the industry’s bad-loan coverage ratio, a measure of its ability to absorb potential losses from soured credit, weakened to 181 percent from more than 200 percent a year earlier.
Concern over borrowers’ ability to service debt has weighed on Chinese lenders, with shares of the nation’s four largest banks trading at valuations at least 35 percent below a gauge of their emerging-nation peers. China’s economy grew last year at its slowest pace since 1990.
The CBRC data comes amid speculation that soured loans could be much larger than indicated by official data.
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