Chinese banks to see sharp rebound in bad loans, small banks' asset quality deteriorates, warns regulator

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Chinese banks may face a sharp rebound in bad loans due to coronavirus-induced economic pain, the banking regulator said, noting the deterioration of asset quality at some small and mid-sized financial institutions was accelerating.

The bad-loan ratio rose 8 basis points from the start of the year to 2.1 per cent as of end-June, while non-performing loans are expected to increase, the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement Saturday.

Outstanding NPLs were 3.6 trillion yuan at the end of June, 400.4 billion . . .

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