China bankers see increase in loan defaults

Business | Agencies and Avery Chen 4 Jun 2020

Bank managers saw mortgage and asset-pledge loan default cases uptick, as some banks reminded staff to be cautious of loan delinquency risks for small enterprises, mainland media Yicai reported.

A source working for a state-owned bank's Shenzhen branch said there are more than 10 inquiries of stopping mortgage payments each month, compared with few before Covid-19, citing the collapse of companies as the main reason for failure to repay mortgages.

Meanwhile, Chinese local governments issued a record 1.3 trillion yuan (HK$1.42 trillion) bonds in May, according to the Ministry of Finance. Local governments issued nearly 3.2 trillion yuan worth of bonds from January to May, increasing 65.1 percent year-on-year.

However, foreign investors only held merely 0.01 percent of local government notes. Issuance will climb to 4.73 trillion yuan this year to help bolster economic growth that is expected to be the worst since the 1970s.

Separately, the Caixin China general services purchasing managers' index rose from 44.4 in April to 55 in May, the highest in nine and a half years. The rate of expansion was the sharpest since September 2010 and faster than the historical average.

Furthermore, China's non-financial outbound direct investment climbed by 0.7 percent year-on-year to 235.08 billion yuan in the first four months of this year.

Search Archive

Advanced Search
July 2020
S M T W T F S

Today's Standard



Yearly Magazine

Yearly Magazine