China’s top banking regulator sees surge of bad loans in 2021 as effects of coronavirus bite
- Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, says the number of bad loans will rise this year
- Chinese banks had a record high of 3.02 trillion yuan (US466.9 billion) in non-performing assets in 2020, government data shows
When the Industrial and Commercial Bank of China (ICBC), the world’s largest bank by asset size, started to auction 657 million yuan (US$101.5 million) of its non-performing assets in six tranches on Monday, it drew strong interest from bad loan disposal firms.
One of the packages received 44 bids from nine asset management companies (AMCs), including domestic firms China Orient Asset Management Company, China Great Wall Asset Management and China Cinda Asset Management, according to a statement released by the China Credit Assets Registration & Exchange, which was approved in January to coordinate bad asset auctions.
“The non-performing loans that need to be addressed could increase further in 2021 and the situation may last until next year,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told a media briefing in Beijing on Tuesday.
After the pandemic, it will be hard for some businesses with abnormal operations to repay [loans]
“After the pandemic, it will be hard for some businesses with abnormal operations to repay [loans], and quite a number of them could face bankruptcy restructuring or even liquidation. So the rise of non-performing loans is inevitable.”