2014-04-08

Bad Loans in China, What's the Number?

Reuters gives the number most often cited in the press:
China says bad loans may rebound in 2014 but still under control
Chinese banks' NPL ratio rose to 1.0 percent at the end of December, its highest level in two years, the CBRC reported in February.

21st Century has their own number: 不良贷款抬头 地方银监局紧急排控 (Bad Loans Rise)

A bank executive puts the number at 2%:
"If you can borrow money, companies will be able to stay afloat, so are 'shattering', by the new-old bank can only renew loans, one can not allow corporate bankruptcy, otherwise the stock of loans are also close not to return; hand is 'Fangshuiyangyu' prior problems, these high-yield loans remained the main source of bank interest income "above Guangzhou banking executives to 21st Century Business Herald reporter said.

Notably, the CBRC "opinion" also requires banks to strictly loan quality classification standards, fully reveals credit risk. Do not Move sheet through other means to cover bad loans, borrowers prevent the use of "old debt" and "bypass" and other means to conceal the deterioration of loan quality and made in a timely manner to carry out stress tests.

"If the liquidity requirements in strict accordance with the loan debt, a majority of Chinese enterprises are not withstand the stress test." Above Guangzhou banking executives pointed out that "if you do not consider other factors such as write-offs, the current NPL ratio of commercial banks at least double, more than 2%. "

21st Century sees it above 1.5% at 12 major banks:
However, according to 21st Century Business Herald reporter statistics, the annual report has been published 12 listed banks non-performing loans at the end of 2013 was 466.979 billion, 76.318 billion more than the increase over the beginning; total loans 90 days past due is 278.97 billion, representing an increase of 47.285 billion year. That is, if you count the loans past due 90 days, 12 listed banks weighted average overdue loan ratio was 1.57%.....

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