THE complaint of bad loans at Chinese banks might wear this year as complicated lending to local governments in 2008 comes due, Deloitte Touche Tohmatsu CPA Ltd said.
In a wide-ranging inform on the China promissory note attention released yesterday, Deloitte mentioned the non-performing loan proportion might enlarge but they stance no great danger to the system. It moreover mentioned unfamiliar banks, even though still tiny players, are assisting give the horizon for a modern promissory note system.
On bad loans, Deloitte remarkable information from a National Audit Office inform final June that showed that 80 percent of local supervision debt is in the form of bank loans.
Loans to local governments have been quite troubling among reports that a few of them might have borrowed as well sufficient and might have difficulty repaying debt.
About half of the 10.7 trillion yuan (US$1.69 trillion yuan) of loans released to local governments in 2008 advance due between 2011 and 2013, Deloitte said. Moody's Investors Service final year estimated that between 8 percent and 12 percent of loans to local governments might turn non-performing.
In their fourth entertain gain report, China's large 5 banks - the Industrial and Commercial Bank of China, the China Construction Bank, Agricultural Bank of China, the Bank of China and Bank of Communications - reported total NPL change of 316.6 billion yuan, or an median 1.09 percent NPL of all lending. The excellent change rose 9.29 billion yuan from the third quarter.
The Deloitte inform moreover mentioned unfamiliar banks in China have turn an entire segment of the sector. At the beginning of the fourth quarter, there were 39 incorporated unfamiliar banks with 247 branches and subsidiaries, 93 unfamiliar bank branches and 207 deputy offices in China.
The properties of unfamiliar banks in China final September grew 18.3 percent from a year progressing to 2.06 trillion yuan, accounting for 2 percent of the promissory note system. The net distinction of unfamiliar banks comprised 1 percent of the attention total.