Bad loans total $88 bn in June

Chinese banks held outstanding bad loans totaling US$88 billion (RMB539.5 billion) at the end of June, equating to 0.96% of all loans, Bloomberg reported, citing a statement by the China Banking Regulatory Commission (CBRC). China’s local government financing vehicles’ combined outstanding loans gained 6.2% to total US$1.58 trillion at the end of June. Chinese banks’ profits may decline in the next three years as a government crackdown on industrial overcapacity slows lending and sours loans, JP Morgan Securities said in a note released on Tuesday. The CBRC said that it will prevent risks in credit, liquidity, asset management products and trust businesses.