Chinese banks risk $200 billion loss due to real estate crisis

According to UBS, Chinese banks face $200 billion in losses in real estate crisis The UBS Group estimated in a report published today that the crisis in China’s real estate sector has left the banking system in serious trouble. UBS estimated that Chinese banks are facing losses of 1.5 trillion yuan ($212 billion) due to loans made to real estate development companies and investments in the bonds and other assets of these companies. Noting that this loss is at a level that can be absorbed by Chinese banks’ strong profits and high reserves set aside for problem loans, UBS executive May Yan said, “We do not expect a banking system crisis at this point due to such a loss.” Yan stated that Chinese banks estimate their total exposure to the real estate sector at around 88 trillion yuan, and emphasized that the stability of the real estate sector is “very important” in preventing further losses.