Defaults on personal loans in China have surged to a record high. According to research firm Gavekal Dragonomics, household non-performing loan balances rose by more than 20 percent last year to a record 2.22 trillion yuan. That is equivalent to about 1.6 percent of GDP, meaning one in ten adults is behind on debt payments. All five major state-owned banks saw their personal loan NPL ratios rise last year, with Bank of Communications up 0.5 percentage points to 1.58 percent. China Merchants Bank's first-quarter personal loan NPL ratio rose 0.13 percentage points year-on-year to 1.14 percent, while its credit card delinquency rate climbed 0.15 percentage points to 1.90 percent. Analysts believe actual bad debts are higher than reported figures.
China Merchants Bank Co LtdPersonal loan NPL ratio rose 0.13pp to 1.14%, credit card delinquency up 0.15pp to 1.90%, indicating deteriorating consumer credit quality.
Bank of Communications CoPersonal loan NPL ratio rose 0.5pp to 1.58%, reflecting rising defaults among state-owned banks.