Chinese banks to see doubling of bad property loan ratio, warns S&P

SHANGHAI : Chinese banks could see their bad loan ratio of property loans more than double by the end of 2021 from the middle of the year, S&P Global Ratings said, as headwinds in the Chinese property sector intensified in the second half.

The stresses in the property sector, in which about one-third of developers are estimated to be in financial trouble, will also contribute about 20 basis points to the overall 1.75per cent NPL ratio for 2021, S&P said, potentially diluting the profitability of lenders. China's banking and insurance regulator has repeatedly warned of lingering pressure on banks from non-performing assets, with an outstanding non-performing loans in the banking sector at 3.6 trillion yuan by end of September.

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