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18-01-2014, 09:47 AM
Dubious Non-performing Loan Rate
April 2013 Issue | by News China Magazine
Despite the growing number of private enterprises going bankrupt due to the sluggish economy, official statistics show less than a 1 percent non-performing loan rate at China’s banks, a figure analysts have been reluctant to accept.
Industry insiders have revealed that in the first half of 2012 alone, China’s 16 listed banks saw an almost 126 billion yuan (US$20bn) increase in the value of overdue loans, indicating an estimated non-performing loan rate of more than 5 percent, with some ailing industries like steel and solar power exceeding 10 percent.
The questionable figures are believed to be due to falsified statistics from local banks, for whom non-performing loans can result in official sanctions. Analysts are calling for higher tolerance to non-performing loans, and the establishment of a credit system.
April 2013 Issue | by News China Magazine
Despite the growing number of private enterprises going bankrupt due to the sluggish economy, official statistics show less than a 1 percent non-performing loan rate at China’s banks, a figure analysts have been reluctant to accept.
Industry insiders have revealed that in the first half of 2012 alone, China’s 16 listed banks saw an almost 126 billion yuan (US$20bn) increase in the value of overdue loans, indicating an estimated non-performing loan rate of more than 5 percent, with some ailing industries like steel and solar power exceeding 10 percent.
The questionable figures are believed to be due to falsified statistics from local banks, for whom non-performing loans can result in official sanctions. Analysts are calling for higher tolerance to non-performing loans, and the establishment of a credit system.