People’s Daily recently reported that the third quarter numbers for commercial banks showed significant negative signs of an economic slowdown. All 16 publicly traded banks have seen apparent declines in their net profit growth rates. The 16-bank Q3 reports have also demonstrated a rapid increase in nonperforming loans, reaching RMB 605 billion (nearly US$99 billion). This represents a year-over-year increase of 31.7 percent. Some banks revealed that most of these nonperforming loans were seen in the east coast provinces and in the sector of medium and small sized private businesses. Many of these banks are now more focused on cleaning up low quality assets as well as increasing their loans to the more profitable industries. Some experts expressed the belief that a certain level of increase in more nonperforming loans can be expected in the foreseeable future.
Source: People’s Daily, November 1, 2014