Nonperforming loans of Chinese banks expected to increase, warns Kellee Tsai
In an interview by SNL Financial, Kellee Tsai, faculty associate of IEMS and professor and head of the division of social science at the Hong Kong University of Science & Technology, told SNL Financial that she expects the NPLs of Chinese banks to continue increasing.
“I expect NPLs will continue to be revealed. One thing that was keeping [NPL figures] from coming out was that loans could be rolled over or re-extended and repackaged in various ways,” Tsai said.
Tsai cited the weak outlook on Chinese property prices as one of the reasons why NPLs of Chinese banks will continue to rise. “Now that asset prices, especially [for] real estate, are softening and even declining in some areas, it makes it even harder to sustain the expected returns,” she said.
Read the full article titled “Nonperforming loans likely to be an ongoing challenge for Chinese banks” (published online on October 15, 2014) here.
