Recent reports from various listed banks in China’s A-share market have unveiled a concerning trend: the delinquency rate on credit cards rose in the first half of the year, with several banks recording rates surpassing 3%. This increase in non-performing loans signals a growing precariousness in the banking risk landscape across China.
As highlighted by statistics from The Paper, among the 42 listed banks, at least 16 reported their credit card delinquency rates as of June 30, 2024. Notably, 13 of these banks indicated an uptick in their delinquency rates from the end of the previous year, while only three noted a decline.
The climbing delinquency rates imply that the financial strain on the public is intensifying, which could expose financial institutions to a heightened risk of bad debts. If this trend persists without any corrective measures, it may further jeopardize the social credit system and disrupt economic stability.
By June 30, 2024, 15 of the 16 listed banks disclosed credit card delinquency rates or impairment ratios exceeding 1.5%. Industrial Bank led the pack with a substantial delinquency rate of 3.88%, followed by Minsheng Bank at 3.24% and the Industrial and Commercial Bank of China (ICBC) at 3.03%.
A closer look at the data by type of bank reveals that joint-stock banks are experiencing higher delinquency rates than their state-owned counterparts. Industrial Bank and Minsheng Bank both reported rates exceeding 3%, while other institutions like Ping An Bank, CITIC Bank, and SPD Bank reported rates above 2%. Among state-owned banks, ICBC’s credit card delinquency rate also surpassed 3%, and Bank of Communications exceeded 2%.
Moreover, insights from a recent report by the banking industry’s credit asset registration and circulation center illuminated a significant surge in the transfer of personal non-performing loans in the second quarter, with both listing and transaction volumes experiencing substantial increases compared to the previous period.
