Big Five Banks Dominate Chinese Property Lending, NPL’s Under 1%


New data indicates that the overwhelming majority of China’s home loans are held by the country’s big five banks, and that their non-performing ratio is below 1%.

21st Century Business Herald reports that the China’s big five lenders (Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, and Industrial and Commercial Bank of China) remain the primary driving force behind home loans in the Middle Kingdom, accounting for as many as 70%.

In 2016 the big five banks increased their home loans by roughly 30%, providing a further 2.92 trillion yuan to borrowers.

CCB is the clear leader when it comes to lending to homebuyers, with their home loan balance leaping by 29.61% to hit 3.59 trillion yuan last year. As of the end of 2016 CCB’s home loans comprised 30.84% of the bank’s total lending.

ABC saw the fastest growth in mortgage loans, with its personal home loan balance expanding by 32.8% to broach a historic high of 2.6 trillion yuan.

According to ABC vice-head Guo Ningning, this surging growth in home loans was due to strengthening of retail sales operations, with 93% of their home loans provided to first-time buyers, and 44% in third or fourth-tier cities.

Banks are highly willing to provide funds to homebuyers due to the perceived safety of such lending, with prices still on an upward trajectory and regulator’s mandating comparatively high down payments.

Property Loan NPL’s Remain Below 1%

According to data from Hithink Flush, the perceived safety of property lending is vindicated by its low NPL rate, which remains around 0.29%.

Taking China’s biggest home lender as an example, in 2016 CCB’s home loan NPL rate was just 0.28%, as compared to 1.52% for the bank’s lending in general, as well as the lowest rate for any of its loan categories.