Bank stress tests have shown that as much as 20% of loans by China’s commercial banks to state-owned enterprises (SOEs) could go bad, MarketWatch reported, citing a report in Japan’s Nikkei newspaper. Nikkei quoted an unnamed China Banking Regulatory Commission (CBRC) official as saying 20% of all outstanding loans to SOEs failed to meet lending requirements, though they could not yet be considered non-performing. Earlier, the CBRC said that non-performing loans had risen to US$67.2 billion by the end of June. Official figures may understate the problem: Ratings agency Fitch has warned that Chinese credit data is distorted by informal securitization of bank loans, which results "in pervasive understatement of credit growth and credit exposure."