Trace of real estate crisis in Chinese banks

The real estate crisis in China is having a negative impact on the balance sheets of the country’s major banks. The real estate crisis in China is having a negative impact on the balance sheets of the country’s major banks. Bank of Communications (Bocom) announced that the problem loan ratio, which was 2.8 percent at the end of 2022, jumped to 4.99 percent at the end of last year. Industrial & Commercial Bank of China (ICBC) announced that the problem loan ratio in mortgage loans increased to 9.6 percent at 27.8 billion yuan. ICBC also announced that problem loans related to real estate in the commercial loan segment were at the highest level of all sectors. The shares of the two banks fell on Thursday. Bocom shares lost as much as 4.9 percent in Hong Kong transactions, while ICBC shares lost as much as 2.5 percent. The decline in housing prices in China had deepened in both the new and second-hand segments in February, showing that it would not be easy to revive the market. The executives of the two banks, on the other hand, emphasized that the risk was manageable. ICBC Vice President Wang Jingwu said his bank is stepping up efforts to manage risks associated with property developers and projects, while Bocom Vice President Yin Jiuyong said property risks are generally at a manageable level.