Uncovering bank bad debts, real estate and personal loans remain high-risk areas.

Data shows that as of the end of June, the overall non-performing loan ratio of 42 listed banks has improved, with only 7 banks including Guizhou Bank and Minsheng Bank experiencing a slight rebound compared to the end of last year. However, it is worth noting that the real estate industry remains one of the industries with high non-performing loan ratios for commercial banks, with some city commercial banks and individual joint-stock banks seeing a significant increase in non-performing loan ratios in the real estate industry. In terms of retail credit, several banks have seen an increase in non-performing indicators for personal consumer loans, credit cards, business loans, and housing loans. It is worth noting that personal housing loans, which have always been seen as high-quality assets by banks, have seen an increase in non-performing ratios. In particular, the non-performing ratio for personal housing loans in all six major state-owned commercial banks has increased. Specifically, the non-performing loan ratios for personal housing loans in ICBC, ABC, CCB, BOC, BoComm, and PSBC are 0.86%, 0.77%, 0.76%, 0.75%, 0.74%, and 0.73% respectively, an increase of 0.13, 0.04, 0.13, 0.17, 0.13, and 0.09 percentage points respectively from the end of 2024. What are the reasons for the increase in non-performing ratios for personal housing loans? Some analysts believe that one reason is the slowdown in household income growth, which directly affects their ability to repay debts such as mortgages. Another reason is the downward pressure on the real estate market. Factors such as fluctuations in house prices and shrinking transaction volumes have created uncertainty about the value of mortgaged properties, leading some borrowers to default due to changes in their expectations or economic pressures. In addition, some banks, in the process of expanding their credit business, have been overly focused on scale and market share, relaxing their lending standards and lowering the rigor of risk assessment.