China’s major banks are grappling with a surge of non-performing loans (NPLs) since last year, largely driven by a weakening real estate sector.
As of the end of 2022, the NPL balance of 40 listed Chinese banks climbed by 8.84 percent to 1.81 trillion yuan (approximately $262.3 billion), while the NPL ratio slightly slid by 0.03 percent to 1.33 percent from the year prior, according to a financial analysis by PricewaterhouseCoopers (PwC), an international accounting and auditing service provider, published on April 20.
NPL is a bank loan in which the borrower cannot pay the principal amount or interest for a certain period of time. NPLs are a significant challenge for the banking sector as it reduces banks’ profitability, thus dragging down economic growth….