China’s bad loan ratio could hit decade-high as authorities help small businesses

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Bad loan ratio in China's banking system could hit the highest in more than a decade after authorities loosened the repayment rules for small businesses hardest hit by the coronavirus outbreak, according to DBS Group.

The NPL ratio is likely to head toward the 2 per cent this year, a level not seen since the first quarter of 2009, according to Cindy Wang, associate research director at Singapore’s biggest banking group. The proportion of soured loans has risen in the past two years to 1.86 per cent in 2019, based on official data.