Bank Mortgage Test: Home prices fell by half the rate of non-performing loans increased by 1.6%

Xinhua News (Reporter Mr Xiong) Bank of Communications, deputy Governor Chan Wen waved in the presentation of the press conference, a new round of mortgage stress tests by the bank showed that, in extreme cases, where prices fell by half, the non-performing loan rate on the banks had risen by only 1.2%-1.6% and the overall risk was manageable. Chan Wen said, before the housing pressure test, house prices fell 30% of the case, the Non-performing loans loan rate changes little. "According to the CBRC's request, we have recently conducted a simulated scenario of 30%, 40% and 50% per cent decline in house prices," he said, adding that the test results showed a 1.6% per cent increase in the non-performing rate of real estate loans to the public (real estate companies), even if prices fell by half. The rate of non-performing loans to private (personal customers) increased by 1.2%. "That is to say, even in extreme cases, the non-performing rate of the mortgage has changed little, the overall risk of (real estate loans) is manageable." "Earlier, Minsheng Bank credit department general manager Shijie said, in real estate prices fell 30%, interest rate rose 162 basis point, credit total scale down 40%,GDP down 1.5% of the heavy pressure test, Minsheng Bank's mortgage business can remain profitable. D051