Bad Loan Ratios of Personal Loans in Major Banks of Six Chinese States Simultaneously Rise

Following the release of the annual reports of the six state-owned banks in China in 2024, data shows that the non-performing loan rates of individual loans in these six major state-owned banks have all increased, sparking market concerns.

The six state-owned banks, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and China Postal Savings Bank, have successively released their annual reports for 2024, revealing the data of each bank. Among them, non-performing loans for individual loans in all six banks have shown an increase.

According to a report by “Economic and Financial Magazine” on April 4, based on the annual reports of the six major banks, by the end of 2024, Bank of China had a non-performing loan rate of 0.97% for individual loans, an increase of 0.21 percentage points compared to the previous year; Agricultural Bank of China had a non-performing loan rate of 1.03%, up by 0.3 percentage points from the previous year-end; Industrial and Commercial Bank of China had a non-performing loan rate of 1.15%, a rise of 0.45 percentage points from the previous year-end; China Construction Bank had a non-performing loan rate of 0.98%, an increase of 0.32 percentage points from the previous year-end; Bank of Communications had a non-performing loan rate of 1.08%, up by 0.27 percentage points from the previous year-end; China Postal Savings Bank had a non-performing loan rate of 1.28%, an increase of 0.16 percentage points from the previous year-end.

In response to this, several officials from state-owned banks stated at the recent 2024 performance release conference that, “In 2024, impacted by the macroeconomic environment, the real estate cycle, and the decrease in household income growth rate, the overall risk resistance of individuals and small and micro clients is relatively weak.”

Industry experts have noted that in the past, individual loans primarily focused on mortgage loans, which had relatively sufficient collateral and good asset quality, coupled with the large annual increase in scale, resulting in traditionally low non-performing loan rates. However, the significant increase in non-performing loan rates for individual loans in 2024 is a phenomenon that deserves attention.

Reports quoting officials from state-owned banks also indicated that the analysis for 2025 suggests that effective demand is still insufficient. The ongoing deep adjustment phase in the real estate market, combined with continued adjustments and contradictions in employment structure, are expected to continue putting pressure on asset quality of individual mortgages, operating loans, and others in 2025.