Tough calls

12 April 2017 By Jun Yang

Big banks’ annual results suggested China’s bad debt problem is easing. Alas, the picture at smaller institutions remains grim. Some, like China Everbright, rolled over lots of shaky loans. It would be easier in the long run if these lenders started recognising more losses now.

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China's banking regulator has told banks to conduct "self-inspections" to determine whether they are using loopholes in rules to avoid reporting non-performing loans, Reuters reported on April 11, citing official documents.

In a notice to banks, dated March 28, the China Banking Regulatory Commission asked lenders to scrutinise their use of asset management plans, bridge financing, short-term loans, wealth management products, and buyback transactions, Reuters said.

On April 10, the CBRC issued new risk-control guidelines, advising banks to adopt measures such as focusing on loans overdue for 90 days or more.

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