Agricultural Bank of China, the nation’s third-largest bank by assets, said it’s facing RMB 1.23 billion ($178 million) in overdue loans, nearly double a previous estimate, from a mortgage boycott on unfinished projects that has swept the country, reports Bloomberg.
After reporting a small gain in earnings on Monday, the Beijing-based lender revealed that the overdue loans are linked to 1,112 projects. It had previously estimated RMB 660 million in loans were affected by the unprecedented protests. Overall, AgBank’s non-performing loan ratio on real estate grew to 3.97% from 3.39% at the end of 2021.
Chinese banks’ exposure to the property sector tops that of any other industry, making them vulnerable to the woes that have already roiled capital markets and burned the nation’s middle class. In a worst-case scenario, S&P Global Ratings has estimated that RMB 2.4 trillion, or 6.4% of mortgages, are at risk amid a mortgage boycott across more than 90 cities as millions of homes have been left unfinished.