China NPLs 'eight times' official rate

摘要

Chinese banks may be in a much more perilous state than previously feared, according to a new analysis by Hong Kong brokerage CLSA, which estimates that as many as one in five loans held by the country's commercial lenders may now be in some state of delinquency. The brokerage estimates the actual non-performing loan rate in the country at between 15% and 19%. Even the lower end of that range would be over eight times higher than the 1.75% official NPL rate published by the China Banking Regulatory Commission last Thursday. CLSA did a bottom-up analysis of corporate finances. It concluded that a slowdown in infrastructure spending had hit many companies hard -especially those in the steel and cement businesses - leaving many with insufficient cash to service their bank loans.