The China Banking and Insurance Regulatory Commission (CBIRC) has announced that bad debt has seen an increase in the first quarter, following the spread of the COVID-19 pandemic.
CBIRC announced on 22 April that the non-performing loan (NPL) ratio of the Chinese banking sector rose by 0.06 percentage points compared to the start of the year to reach 2.04%, as a result of the impact of COVID-19 on micro and small-enterprises, and the accommodation and catering sectors.
CBIRC vice-chair Huang Hong said that the first quarter saw a rise in loan defaults, repayment delays and bad loans as a result of the spread of the pandemic.
The Chinese banking sector provided 2.5 trillion yuan in credit support to enterprises, vendors and individual businesses in the first quarter, twice the amount compared to the same period last year.
CBIRC’s chief risk officer Xiao Yuanqi (肖远企) said that NPL’s are likely to rise in future, although the increase won’t be large.
Xiao said that over 450 billion yuan in NPL’s were disposed of in the first quarter, fo ran increase of over 80 billion yuan compared to the same period last year.