Non-performing loans rose by RMB72.5 billion (US$11.8 billion) in the third quarter, the most since 2005, Bloomberg reported, citing a statement from the China Banking Regulatory Commission. Soured credit accounted for 1.16% of lending , up from 1.08% three months earlier. Bad loans are “likely to rise for the next few quarters as a result of the slowdown in the Chinese economy,” Tommy Xie, a Singapore-based economist at Oversea-Chinese Banking Corp., said before the statement. Lenders’ bad-loan coverage ratio, a measure of reserves for soured credit, fell to 247.2% as of September 30 from 262.9% in June.
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