China Banking Regulatory Commission’s data released yesterday show that non-performing loans increased to RMB456.4 billion by the end of second quarter, while non-performing loans ratio remains unchanged at 0.9%.
The total amount of NPLs has been falling over the past few years and hit the lowest point in the third quarter of 2011. Since then, the total NPLs have been increasingly slowly but steadily.
We will not be surprised to see both NPLs and NPL ratio to trend higher in the future as the slowing economy should negatively impact loan quality, although we believe (and will believe) that the amount of NPLs and NPL ratio have been (and will be) understated.
Source: Bloomberg
This article originally appeared here: Non-performing loans at China’s banks have started rising
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