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China's Bad Loans Rise to Highest in a Decade as Economy Slows

  • Nonperforming loans jumped by 51% last year from end of 2014
  • Banks' ability to absorb potential losses weakens, data shows
Bloomberg business news

Reasons Why There's a Surge in New Loans in China

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Soured loans at Chinese commercial banks rose to the highest level since June 2006 as the nation’s economic expansion slowed to the weakest pace in a quarter century.

Nonperforming loans rose 7 percent from September to 1.27 trillion yuan ($196 billion) by December, the slowest quarterly increase in two years, data from the China Banking Regulatory Commission showed Monday. Including "special-mention" loans, where future repayment is at risk but yet to become nonperforming, the industry’s total troubled loans swelled to 4.2 trillion yuan, representing 5.46 percent of total advances.