Jul 15, 2022 04:34 AM

FINANCE

Spreading Mortgage Strike Stokes Financial Contagion Fears

By Zhu Liangtao and Han Wei

Mortgage loans have been among the safest assets of Chinese banks with the nonperforming ratio stabilized at 0.3% for years

Mortgage loans have been among the safest assets of Chinese banks with the nonperforming ratio stabilized at 0.3% for years

Escalating refusals by frustrated homebuyers to make mortgage payments on stalled property projects delivered a hit to Chinese bank stocks amid growing fears of financial contagion.

Stocks of Chinese banks plummeted for two consecutive days as the news swirled. Bank stocks in Shanghai declined 1.69% Wednesday and a further 1.54% Thursday, according to data from Hithink Flush Information Network Co. Ltd.

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