China’s major banks are speeding up (bad) property loan write-offs

I posted earlier on moves in China to dump bad property-related loans:

• China sets record in bad asset disposals, shifts focus to housing market

More now:

• China’s major banks are speeding up property loan write-offs under regulatory pressure to clean up balance sheets and support the broader economy.

• Regulators, including ICBC, have been urged to accelerate the disposal of bad real estate loans—some banks have doubled their write-off targets.

• In 2024, a record ¥3.8 trillion ($532B) in bad assets were removed, with property loans a major contributor.

• While write-offs may free up capital and improve balance sheets, they could also weigh on profits and capital ratios.

• The property sector remains weak, with Fitch expecting non-performing loan (NPL) ratios to stay high at 4–5% this year.

• Analysts view the move as necessary to restore confidence and possibly a sign that the market is nearing a bottom.

This article was written by Eamonn Sheridan at www.forexlive.com.