Wreck Loans Increased 31 Percent in China
Which it is one of the world’s biggest bank ICBC is to make a profit in the first six months of the year increased by 31 per cent of bad loans and reported that 25.5 billion dollars.
Credit crisis may play China’s door
The world’s 2nd largest economy in the global economy reduced demand in China is causing alarm bells ringing. Last banking data gives bad signals for the outlook of the economy. Analysts’ credit crisis could knock on the door of China is making warning.
Volatility in the Chinese stock market in recent months time attention has turned to the country’s financial system. The stock market of the country within a few months until England suffered a loss of economic size. However, according to experts stock market depends on the health of the banking system is not the real economic damage in the country. And the world’s second largest economy, dark clouds began to gather on China’s banking sector. The slowdown in the economy brings clouds and a huge proliferation of bad loans accordingly.
The world’s second largest economy, the decrease of demand in China in the global economy and the slowdown in the economy is causing alarm bells ringing. Last banking data also gives a bad signal for the outlook of the economy. China Banking Regulatory Commission, according to the first half of the year the amount of bad loans in Chinese banks, for the first time since 2008, 1 trillion yuan (157 billion 382 million dollars) level of past and reaching 1.5 percent share of total loans.
More than this could be submerged Credits
However, some banks treat the problem of bad loans is a sign that the definition of loose even greater might. At least 90 days past the maturity of bank loans is expressed not reflected in the growth rate of the overall number of non-performing loans. This means that the bad loans of Chinese banks is creating concern that lower display. According to notes issued by UBS banking analyst Jason Bedford, at least 90 days past due in the first half of the year showed an increase in public banks in China, but 166 percent of the loans shown in the wreck. For example, China Minsheng Banking Corp’s bad loan ratio of 1:17 ratio in 2014 came 1.36’y percent in June. But the return at maturity, but 70 percent of the number of loans increased by 48.4 billion to appear as sunken came within 2.57 percent of all loans.
Wreck Loans Increased 31 Percent
Average per year in the period up to 2015 the largest bank in the country was increasing 10 percent profit from the financial crisis. However, this increase in the first half of 2015 the net land bank, had to set aside 1.5 percent of capital due to bad loans. More alarmingly, the world’s largest bank in terms of assets, which is to make a profit in the first six months of the year increased by 31 per cent of bad loans ICBC and reported that 25.5 billion dollars.
Banks Capital Enters Distress
Mizuho Securities banking analyst at China, faced with a systemic credit crisis. Chinese banks until mid-2014 was able to deal with the deterioration in loan performance. However, this no longer seems to have changed “the assessment found.
The increasing shortage of capital into the banks of bad loans after last year’s record rate of capital returns to investors to receive funding this year. Bad loans in the first half of 2015 showed a 30 percent increase, some banks could be doubts about how long the economic slowdown is beginning to emerge. Chinese banks to increase their equity capital late last year was 57.6 billion dollars needed. If the collection rate of bad loans increased 1.5 percent to 4 percent of Chinese banks will need additional capital to 87.07 billion dollars.
It’s up at the ceiling deposit interest
China, the lifting of the ceiling on deposit rates applied in bad loans is seen as a risky step. Analysts are already in excess of the sunken level of competition for obtaining deposits, as that could lead to work in an environment where banks are doing high alert should be careful.
Biggest Risks British Banks
Upcoming vote that signals a banking crisis in China increased, recent data show that the largest English-risk foreign banks in China. HSBC’s latest report, increased by 12 per cent of loans in China last year reported that 36.2 billion dollars. Standard Chartered also increased 30 percent in the same period of the loan is open to Chinese customers, he said. 221.2 billion of risk in the British bank China totaled about 86.5 billion US risks. England, fiscal year that ended on March 31 was the biggest source of new loans in China.