China Considers Further Relief as Deadline Nears on $211 Billion in Bad Debt
- Regulator, banks said to discuss extending relief measures
- Bad loan cleanup seen lasting years, weighing on profits
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In the battle to keep millions of China’s smaller businesses afloat, banks are counting on being allowed another round of exceptions for borrowers falling behind on payments.
The regulator and some lenders have discussed extending loan relief beyond a June 30 deadline for corporates hurt by the pandemic, said people familiar with the matter, asking not to be named as the talks are private. The guidance from Beijing is to offer flexibility on principal and interest payments, the people said. Banks would see a surge in bad loans in the second half without such measures, weakening their ability to keep credit flowing, according to bankers and analysts.