China Property Crisis Is Rippling Through Its Biggest Banks
- Asset quality worsened in residential and corporate segments
- Banks post scant profit growth as interest margins erode
China’s property downturn is eroding the balance sheets of the nation’s largest state banks.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
China’s protracted property downturn is eroding the balance sheets of the nation’s largest state banks as their bad loans creep up.
Bank of Communications Co. reported Wednesday that its property bad loan ratio jumped to 4.99% at the end of last year from 2.8% a year earlier. While the balance of its overdue mortgages slipped, the special mention loans for the segment — a leading indicator of soured loans — jumped 23% to 9.88 billion yuan ($1.4 billion).