China’s banking sector is seeing a rise in nonperforming loans as the Covid-19 pandemic hurts businesses and public consumption, reported Caixin.
Banking institutions sat on RMB 3.3 trillion ($471 billion) of nonperforming loans as of the end of February, or 2.08% of total loans outstanding. The bad loan ratio was 0.05 of a percentage point higher than in the previous month.
In addition, specially mentioned loans — those potentially at risk of not performing — totaled RMB 5.8 trillion by the end of the month. That category’s ratio to total loans rose 0.17 of a percentage point from the previous month, according to the China Banking and Insurance Regulatory Commission (CBIRC) Tuesday.
China’s bad loans have steadily climbed amid the outbreak and will continue to rise in coming months, said Xiao Yuanqi, the chief risk officer of the CBIRC, at a briefing.