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China can control risks in banking sector even as bad loans increase

Reuters reporting comments by Peoples Bank of China governor Zhou published on their website today 9 Oct

  • risks in China's banking system are controllable even as bad loans increase,
  • lenders have adequate capital
  • credit growth is fast, and that is a reflection of China's efforts in boosting growth amid a weak global economy
  • but as the global economy gradually heads towards a recovery, China will have to control credit growth

The PBOC published the comments, made at a G20 meeting in Washington earlier this week, on its website earlier today.

Chinese banks extended 948.7 billion yuan ($142bln) in net new yuan loans in August, more than double the figure of the previous month. and much can be attributed to strong mortgage demand.

Chinese property prices have risen sharply in the past year, drawing the attention of the central government, and a major price correction would add to strains on banks already wrestling with souring loans.

The non-performing loan rate in the banking sector increased to 1.75% at end-June from 1.67% at the end of last year, official data showed.

The government is due to publish September's lending data this coming week and Q3 GDP later this month.

Eamonn had other comments from the meeting in a post earlier where Zhou expressed caution over rising property markets and said the PBOC is " paying close attention "

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PBOC says NPL risks are controllable

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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