bad loans

Banks may face some backsliding in its bad loans ratio, S&P’s Ivan Tan warned.

S&P estimated an NPA ratio of 7.6% as of end-2022 vs reported NPL ratio of 1.71%.

But should interest rates rise sharply, banks may face more defaults.

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

But local asset management companies may face pressure to acquire bad debt at prices that make it challenging to earn a commercial return.

The rate of their bad loans has hovered around 10% to 10.5%.

The delinquency ratio has been on the decline since May 2018.

BOC’s non-performing asset ratio is expected to steadily decline in the next 24 months.

Ratio of bad loans to total lending came at only 0.62% as of end-March.