Bank of China headquarters in Beijing (Photo courtesy of user Max12Max from Wikimedia Commons)

Bank of China bad loans, capitalization ‘stable’ amidst real estate woes: S&P

BOC’s NPL ratio for mainland real estate loans rose 62 basis points in H1.

The Bank of China can withstand stress from property woes and rural regions in China, according to S&P Global Ratings.

Despite rising defaults from Chinese property developers, the bank’s non-performing loans (NPL) and special mention loan ratios remained broadly stable at 1.34% and 1.29%, respectively, thanks to the bank's diversified portfolio, S&P said.

BOC's NPL ratio for mainland real estate loans increased 62 basis points in the first half of 2022 to 5.67%. Mainland real estate loans accounted for 4.3% of the group's loan book.

ALSO READ: China’s small, regional banks gain lifeline with planned NPL disposal initiative

Capitalization is also likely to remain adequate, given its reduced risk appetite and capital issuance. The bank's risk-weighted assets increased 1.7%, less than its loan growth of 7.9%, in the first half of the year.

Meanwhile, the release of excess provision coverage should help mitigate pressure on BOC's profitability, S&P said. NPL coverage ratio is at 183% as of end-June, still well above the regulatory requirement to lower credit costs.

Follow the links for more news on

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!

Event News

Event News

BDO Capital Named as PH’s Corporate and Investment Bank of the Year for 5 Consecutive Years Co-Written / Partner
BDO Capital & Investment Corporation (BDO Capital) has been recognized as the country’s Corporate and Investment Bank of the year for the 5th straight year at the Asian Banking & Finance Awards. BDO Capital’s remarkable achievement is a testament to its consistent excellence in delivering best-in-class investment banking services across various product lines in the Philippine capital markets.