China Construction Bank and Bank of Communications reported that their bad-loan ratios had stopped climbing after previously rising like clockwork. According to Bloomberg, the pair also managed in the second quarter to keep their bad-debt provisions above a regulatory minimum of 150% of existing soured credit. The figures were in half-year earnings reports released Thursday. Investors are looking for any signs that China’s banks are getting on top of their bad loans, estimated by analysts to be much higher than the levels officially reported. At Commerzbank AG, analyst He Xuanlai said the numbers were an encouraging signal, but it was too early to see a “tipping point.” Likewise, Bank of Communications executives cautioned that it was too early to say the worst was over.
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