China’s Four Largest Banks’ Bad Loans Hit Multi-Year Highs, Tuesday, April 30, 2019
Bad loans at China’s four largest lenders grew at the fastest pace since 2017 in the first quarter, Bloomberg reported citing financial statements.
Industrial & Commercial Bank of China Ltd. (HK:1398) reported a CNY 5.2 billion ($770 million) increase in non-performing loans in the January-March period. It was the fastest quarterly increase in almost three years.
Meanwhile, Bank of China Ltd (HK:3988). and Agricultural Bank Of China (HK:1288) saw their bad loans rise by CNY 6.1 billion and CNY 2.7 billion respectively.
China Construction Bank Corp (HK:0939)’s soured credit increased by CNY 6.6 billion.
Citing an annual survey conducted by China Orient Asset Management, Bloomberg reported that 45% of 202 bankers believe China’s bad-loan ratio will peak in 2020.
Despite the growth in bad loans, the banks reported that total earnings also grew at the fastest pace in five years.
However, shares of those banks underperformed gains in the benchmark index, according to data compiled by Bloomberg.
Prices of China-listed banks increased by 19% so far in 2019, compared to the 23% gain in the Shanghai Composite.
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