Bad Debts Piling Up in Mining Sector, Retail
According to bank annual reports for 2016, bad debts stabilized. The Chinese central bank’s gusher of liquidity in 2016 sparked a global commodities rally, certainly it was able to stabilize debts. Some sectors continued to deteriorate though. One is retail, which is suffering the same online competition as brick-and-mortar in the USA.
Data show that the major banks of non-performing loans are still concentrated in the wholesale and retail trade, manufacturing and other industries with the overall economic situation more closely related , but the two industries last year, non-performing loans increased significantly more than 2015 in the wholesale and retail trade. Manufacturing nonperforming loans accounted for the proportion of all corporate loans also generally lower than the beginning of last year.
The sector seeing the worst deterioration, doubly worse given the commodities rally in 2016, was mining:
It is noteworthy that the mining industry to increase the risk of loan exposure. In addition to the lack of industry distribution data of the Bank, the remaining 10 bank mining industry, the overall increase in non-performing loans over 50%, Minsheng, Pingan, Shanghai Pudong Development, bad debts increased more than 200%.
Changes in the industry’s nonperforming loan data also affect the mutual credit strategy with banks. Data show that, in addition to the lack of data, the remaining 10 banks wholesale and retail trade, manufacturing and mining loans balance dropped at the start of the year, of which only Minsheng and Pingan continue to increase manufacturing sector loans.
iFeng: 不良贷款新动向：采矿业风险加速暴露 长三角地区回暖