Non-performing Credit Card Debt Rises amongst Chinese Banks During First Half of 2020

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Chinese banks have seen a sizeable rise in non-performing credit card debt in the first half of 2020, as the COVID-19 pandemic took its toll on both the domestic and global economies.

A report from 21st Century Economic Herald found that non-performing credit card debt rose at all of China’s big six state-owned banks in the first half of 2020.

At ICBC the credit card NPL ratio rose 0.44 percentage points to hit 2.65%, while at China Construction Bank (CCB) it saw a 0.14 percentage point increase to reach 1.17%, at ABC the rise was 0.24 percentage points to reach 1.81%, and at Bank of China the increase was 0.35 percentage points to reach 2.57%.

Bank of Communications saw its credit card NPL ratio rise 0.52 percentage points to 2.57%, and Postal Savings Bank of China saw a 0.25 percentage point increase to 1.99%.

A source from the Bank of Communications Credit Card Centre said that last year it had already implemented “strategic contraction” with the goal of dealing with external risk, but the spread of the COVID-19 pandemic had undermined current indicators.

Out of listed joint-stock banks Shanghai Pudong Development Bank had the highest credit card NPL at 3.31%, followed by China Minsheng Bank, at 3.23%.

Four other joint-stock banks had credit NPL’s above the 2% threshold, including China CITIC Bank (2.5%), Huaxia Bank (2.44%) Ping An Bank (2.35%) and Industrial Bank Co., Ltd. (2.01%).

Non-performing Credit Card Debt of Big State-owned Banks, Joint-stock Banks

BankCredit cards in circulation (million)Increase compared to end of 2019Overdraft balance (billion yuan)Increase compared to end of 2019NPL ratioIncreased compared to end of 2019 (bps)
ICBC159.230.14%657.775 -3.00%2.65%0.44
China Construction Bank139.004.50%774.5954.51%1.17%0.14
Agricultural Bank of China125.004.16%485.4162.19%1.81%0.24
Bank of China129.58233.70%481.9161.09%2.57%0.35
Bank of Communications71.47-0.46%445.266-4.73%2.90%0.52
Postal Savings Bank of China33.416510.67%125.8922.20%1.99%0.25
China Merchants Bank96.38731.14%652.232-2.80%1.85%0.5
Shanghai Pudong Development Bank 44.09360.23%393.829-6.54%3.31%1.01
Industrial Bank Co., Ltd. 54.63035.20%379.4818.64%2.01%0.54
China CITIC Bank87.99215.60%480.738-6.52%2.50%0.76
China Everbright Bank445.5570.16%
Ping An Bank 61.48011.90%512.504-5.20%2.35%0.69
China Minsheng Bank 60.00034.43%457.5372.61%3.23%0.75
Huaxia Bank17.84070.17%164.181-2.43%2.44%-0.79
Zheshang Bank3.72873.08%17.35

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