China’s Property Lifeline Exposes Banks to Big Losses, Job Cuts
- Risky developer loans threaten to erode bank credit quality
- Banks are weighing lower profit targets, job cuts in response
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China’s escalating push to have its banking behemoths backstop struggling property firms is adding to a maelstrom of woes for the $57 trillion sector.
Already stung by soaring bad loans and record low net interest margins, lenders such as Industrial and Commercial Bank of China Ltd. may soon be asked for the first time to provide unsecured loans to developers, many of whom are in default or teetering on the brink of collapsing.