Bad loans at China banks hit decade high as economy slows

Beijing

SOURED loans at Chinese commercial banks rose to the highest level since June 2006 as the nation's economic expansion slowed to the weakest pace in a quarter century.

Non-performing loans jumped 51 per cent from a year earlier to 1.27 trillion yuan (S$270 billion) in December, data from the China Banking Regulatory Commission (CBRC) showed on Monday. The bad-loan ratio climbed to 1.67 per cent from 1.25 per cent, while the industry's bad-loan coverage ratio, a measure of its ability to absorb potential losses from soured credit, weakened to 181 per cent from more than 200 per cent a year earlier. The lenders' core Tier-1 capital ratio improved to 10.91 per cent from 10.56 per cent, the data show.