China Bad Debt Increases

Chinese banks face a spike in bad loans amid slowing economic growth, PwC warns in a new report.  “There are a variety of indications that credit risk exposure is accelerating,” said PwC China Banking and Capital Markets leader Jimmy Leung in a press release published on Thursday.

Asset quality continues to worsen, while the average overdue loan period is constantly increasing, Leung said, noting there is growing pressure on overdue loans to be downgraded to the non-performing loan category.

Slowing growth in the world’s second largest economy prompted the People’s Bank of China (PBoC) to stimulate lending, but that has seen the quality of loans deteriorate.