In a report published on December 15th, Standard & Poor warned that the non-performing loan, or NPL, rate of the Chinese banking industry could double by the end of 2021.
S&P expected the NPL ratio of the Chinese banking industry would climb 5.5% as December wraps up. The rate was 2.5% in mid-2021.
The stock market index said one-third of China’s real estate developers are struggling with financial challenges. This increased the NPL ratio by about 20 basis points and took a toll on banks’ profitability, NTDTV reported.
China’s National Bureau of Statistics reported that in November, only nine out of 70 cities saw an increase in property values. The actual home sales prices plummeted 16.31%, marking the fifth consecutive month of decline.
During that month, the rate of new house construction decreased by 21.03% over the same period last year. The real estate investment of investors decreased by 4.3%.
According to Reuters, new home prices in November fell by 0.3% compared to October. The paper noted that the present drop in new house demand was in line with other signs of the Chinese economy’s slowdowns.