Japanese media disclose Chinese banks face massive non-performing loans

The Nikkei News (Nikkei), a Japanese business newspaper, disclosed over the weekend that 20% of loans from Chinese commercial banks to state-owned enterprises could be bad debts.　　The report quoted an unnamed Chinese banking regulatory Commission official as saying that the China Banking Regulatory Commission's recent stress tests showed that 20% of state-owned enterprises ' outstanding loans were "problematic" by the end of June.　　The official was quoted as saying the loans did not meet the lending standards and could lead to defaults, although the risks remained manageable and the loans were not seen as non-performing loans.　　The report said the current loans to state-owned enterprises amounted to 7.7 trillion yuan (1.14 trillion U.S. dollars), which means that 1.54 trillion yuan of loans is "problematic" category.　　The result is that the CBRC will order banks to raise loan losses, the report said.　　According to the Wall Street Journal, China's Banking Regulatory commission had previously released data saying that the total non-performing loans of Chinese commercial banks amounted to 454.91 billion yuan at the end of June, accounting for 1.3% of the total lending by lenders. The CBRC said non-performing loans fell by 0.28%, but did not specify what time period to compare.　　Looking from the structure of non-performing loans, the balance of loss class loan is 64.91 billion yuan, doubtful loan balance is 222.67 billion yuan, and subprime loan balance is 167.33 billion yuan. The CBRC said in its statement that the January-June Commercial Bank provision coverage rate reached 186%, up 31% from the beginning of the year.