<\/p>\n
Banks\u2019 nonperforming assets are expected to peak at 5.9% in 2026.<\/p>\n
Banks in China are about to see nonperforming assets (NPA) rise on tariff-related strains from micro and small enterprises (MSEs) and unsecured consumer credit.<\/p>\n
Commercial banks’ NPA ratio is expected to peak in 2026, at 5.9%. NPA ratio includes nonperforming loans (NPL), special-mention loans, forborne loans, and other problematic loans overdue by 90 days and classified as normal, S&P Global Ratings said in a report on 3 April 2025.<\/p>\n
At worst\u2014 in which the tariffs hit harder, and the property sector doesn’t hit its bottom\u2014 S&P projects that Chinese banks’ NPA ratio could almost return to COVID-lockdown levels of 6.5% in 2022.<\/p>\n
Weakening asset quality at China’s commercial banks will likely push up credit losses, it added, moderated by the sector\u2019s provisioning.<\/p>\n
The banking sector\u2019s regulatory NPL provision coverage was 211% in 2024.<\/p>\n
\u201cWe expect banks with the largest buffers to draw down on such reserves to prevent further erosion of profitability,\u201d S&P said.<\/p>\n
The ratings agency forecasts annual credit losses to average RMB2.5t over 2025-2027\u2014 or 4% of China\u2019s annual GDP over this period.<\/p>\n
Average annual credit losses could increase to RMB2.7t in a downside scenario of the tariffs hitting harder; or down to RMB2.2t if China\u2019s stimulus helps it reach its 5% growth targets.<\/p>\n
\u201cChina has battled a pandemic, a property downcycle, and a buildup of risky LGFV debt. And it now faces additional strains from more U.S. tariffs on its exports. S&P Global Ratings believes the drag on the economy will hurt the asset quality of banks,\u201d S&P said.<\/p>\n
Prior to the reciprocal tariffs announced on 2 April, S&P\u2019s analysts forecasted GDP growth is expected to slow to 4%.<\/p>\n
Growth deceleration could push up the commercial banking sector’s NPA ratio over 2025-2027, S&P warned.<\/p>\n
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Banks\u2019 nonperforming assets are expected to peak at 5.9% in 2026. Banks in China are about to see nonperforming assets (NPA) rise on tariff-related strains from micro and small enterprises (MSEs) and unsecured consumer credit. Commercial banks’ NPA ratio is expected to peak in 2026, at 5.9%. NPA ratio includes nonperforming loans (NPL), special-mention loans, […]<\/p>\n","protected":false},"author":1,"featured_media":3736,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3735","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bez-rubriki"],"featured_image_src":{"landsacpe":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/04\/ICBC-56-612x445.jpg",612,445,true],"list":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/04\/ICBC-56-463x348.jpg",463,348,true],"medium":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/04\/ICBC-56-300x225.jpg",300,225,true],"full":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/04\/ICBC-56.jpg",612,459,false]},"_links":{"self":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/3735","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/comments?post=3735"}],"version-history":[{"count":1,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/3735\/revisions"}],"predecessor-version":[{"id":3737,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/3735\/revisions\/3737"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media\/3736"}],"wp:attachment":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media?parent=3735"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/categories?post=3735"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/tags?post=3735"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}