Non-performing loans reached record levels amongst China’s largest banks, as the the pandemic continue continues to pressure mainland balance sheets.
Non-performing loans soared to a record 979 billion yuan ($146 billion) in the third quarter, according to official reports released last week which also posted 175 billion yuan in credit impairment charges.
This is despite the reported 4.9 percent economic expansion in the same period, which has been attributed to uneven growth.
Delayed Hit
Although losses slowed to under 5 percent amongst China’s big four banks (Industry and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China), this was a considered improvement from the 25 percent plunge the previous quarter.
But the actual current state of affairs remains to be realized as Chinese authorities have allowed many borrowers to delay payments on interest and principal to March next year. In addition, banks have been required to sacrifice 1.5 trillion yuan in profits to support the nation’s recovery efforts.
