Caixin
Apr 17, 2018 06:55 PM
FINANCE

Banks Likely Underreport Bad Debts, State Firm Finds

Attendees of a finance expo in Beijing visit the stand of China Huarong Asset Management Co. on Jan. 25. Photo: IC
Attendees of a finance expo in Beijing visit the stand of China Huarong Asset Management Co. on Jan. 25. Photo: IC

Banks have likely understated their bad debt, according to one of China’s four national asset management companies (AMCs), which expects nonperforming loans (NPLs) to grow this year as lenders come under more pressure to recognize and dispose of them.

The AMC’s report was a rare acknowledgment from a state-owned company that the official figure for tracking bad debt in the banking system might be underestimated — a view that is widely held outside of China.

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