, China

Bad debts in Zhejiang pull down banking sector

Massive bankruptcies among small businesses causes soured loans in Zhejiang Province to balloon by over 50%.

Soured debts at China’s 3,800 banks increased for a third straight quarter to US$71.8 billion in June, said the China Banking Regulatory Commission, the banking sector regulator. It is the longest streak of deterioration in eight years and puts the spotlight on the pressures on asset quality and profit growth.

The government blamed most of the increase on the eastern Chinese province of Zhejiang where bankruptcies among small businesses caused soured debts to jump by over 50% in the first half. The city of Wenzhou has been identified as the epicenter of the bad loan tsunami.

One analyst said the banking sector is a bit worried about the industry’s asset quality as bad loans may climb if the economic slowdown deepens, Loan growth is another concern, he added.

China’s economy grew 7.6% in the second quarter, the slowest pace in three years. Industrial companies’ profits fell 2.2% in the first half, compared with a 29% improvement in the same period last year.

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Top News

UOB signs MoUs to support business expansion across ASEAN
These partnerships aim to enhance trade, investment, and the internationalisation of Singapore enterprises.
Singapore fraud losses rise as APP scams takeover
The report revealed human-initiated attacks in Singapore surged by 30% YoY, even as automated bot attacks declined by 27%.