UPDATE 1-Chinese banking sector bad debt ratio rises as pandemic impact persists

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BEIJING, Oct.21 (Reuters) – China’s banking sector saw its bad debt rate rise to 1.87% at the end of September from 1.86% three months earlier as the impact of the COVID-19 pandemic continued , announced Thursday the regulator of the sector.

The expiration of loan relief policies, put in place last year to help businesses at the onset of the health crisis, also contributed to the increase.

The outstanding NPLs in the banking sector stood at 3.6 trillion yuan ($ 562.63 billion), said Wang Chaodi, head of the general office of the China Banking and Insurance Regulatory Commission (CBIRC ), to journalists in Beijing.

Chinese banks “still face relatively strong pressure to see non-performing assets rebound and continue to be exposed to potential risks,” Wang said.

“Banks and insurers have continued to develop their risk prevention capacities, which are generally controllable,” he added.

Analysts have long believed that NPLs in China are much higher than officially reported, and recent signs of slowing economic growth could add to the pressure on heavily indebted companies, especially developers. real estate.

The CBIRC will continue to urge banks to comply with regulatory requirements to gradually reduce the size of home loans and personal mortgages while providing sufficient financial support to first-time buyers, said Liu Zhongrui, head of the statistics department. of the regulator.

The problems of debt-laden developer China Evergrande Group would not impact the entire real estate industry or the credibility of Chinese companies, as the country’s economic growth remains stable and on the rise, Liu added.

$ 1 = 6.3985 yuan Chinese renminbi Reporting by Tina Qiao and Ryan Woo in Beijing, written by Zhang Yan; Editing by Kim Coghill


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