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Banks (Finance)

China's Big Three State-Owned Banks See Special-Mention Loans Surge in First Half of 2023

Strategic Insights

— 1 min read

China's Industrial and Commercial Bank of China (ICBC), Bank of China (BoC), and China Construction Bank (CCB) saw their special-mention loans soar by 20.2 billion yuan (approximately US$3 billion) in the first half of 2023, according to their half-year reports. Despite improved asset quality, experts caution that the rise of special-mention loans should be closely monitored, as they carry potential risks of being reduced to bad loans if economic conditions deteriorate. The agricultural sector and joint-stock banks showed declines in special-mention loans, while Shanghai Pudong Development Bank and Bank of Nanjing bucked the trend.

Key Takeaways:

  • Special-mention loans of China's big three state-owned banks, ICBC, BoC, and CCB, surged by 20.2 billion yuan (US$3 billion) in the first half of 2023.
  • The Agricultural Bank of China (ABC) and the Bank of Communications (SSE:601328, SEHK:03328) saw their special-mention loans decline in the first half of 2023.
  • Shanghai Pudong Development Bank and Bank of Nanjing (SSE:601009) were exceptions, as their special-mention loans increased in the first half of 2023.
  • Joint-stock banks and city commercial banks collectively saw declines in special-mention loans in the first half of 2023, except for Shanghai Pudong Development Bank and Bank of Nanjing.
  • Special-mention loans of the 15 commercial banks that released their half-year reports rose by 1.756 billion yuan in the first half of 2023.
  • Analysts warn that special-mention loans may turn into bad loans if economic conditions worsen in the second half of 2023.
  • The asset quality of Chinese commercial banks has continued to improve, with a decline in bad loan ratios.

Statistics:

  • 20.2 billion yuan (approximately US$3 billion) - the surge in special-mention loans of China's big three state-owned banks (ICBC, BoC, and CCB) in the first half of 2023.
  • 8.817 billion yuan - the increase in special-mention loans of China Construction Bank (CCB) in the first half of 2023.
  • 7.164 billion yuan - the increase in special-mention loans of Bank of China (BoC) in the first half of 2023.
  • 4.213 billion yuan - the increase in special-mention loans of Industrial and Commercial Bank of China (ICBC) in the first half of 2023.
  • 1.756 billion yuan - the increase in special-mention loans of the 15 commercial banks that released their half-year reports in the first half of 2023.

Sources:

  • (XIC)

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