2014-04-23

China Bad Loan Ratio Up

Chinese Bad-Loan Ratio Rises ‘Significantly,’ Huarong Says
The business environment this year has been “grim and complicated” as lenders face pressures on asset quality, liquidity and lending margins, China Huarong Asset Management Co. Chairman Lai Xiaomin said during an internal meeting on April 15, according to a statement today on the website of the Beijing-based company.

China’s slowing economy has made it tougher for borrowers to repay debt, driving up banks’ sour loans for a ninth straight quarter as of December to the highest level since 2008, data from the banking regulator show. New nonperforming loans amounted to more than 60 billion yuan ($9.6 billion) in the first two months of this year, compared with 100 billion yuan for all of 2013, China Business News reported on April 9, citing people it didn’t identify.

The numbers are far worse than they appear if Chinese reporting is accurate. See Bad Loans: 100 Billion in 2013, 60 Billion in First Two Months of 2014; Tricks For Hiding NPLs

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