Property slump exposes local banks to greater risk of developer defaults

Falling property prices in both the commercial and residential sectors has cast doubt over developers’ ability to repay bank loans, South China Morning Post reported, citing a report by Standard & Poor’s Financial Services. According to the report, local banks are now facing “the greatest risk of asset deterioration” because of the property downturn. Among banks exposed to the asset risk, Bank of East Asia’s mainland subsidiary led with 30.1% of its total loans going into the sector, followed by Beijing Rural Commercial Bank with 21.8% of total lending and Bank of Chengdu at 20.3%.