BEIJING | SHANGHAI: China’s Financial institution of Communications (BoCom) on Friday warned of liquidity dangers within the property sector after it posted an nearly 5% rise in first half internet revenue.
“Asset high quality management within the second half of the yr nonetheless faces pretty giant challenges and pressures, such because the liquidity issues seen in the actual property trade,” stated Chief Threat Officer Lin Hua in a press convention, including that threat might unfold to different industries.
Lin additionally expects the standard of retail credit score property to fluctuate within the second half with the chance on bank card debt pretty excessive.
The outcomes come after a depressing first half by which rising developer defaults dampened the property market as COVID shut-downs in some cities introduced enterprise to a halt.
However regardless of this, Vice President Zhou Wanfu stated housing initiatives that had been delayed solely accounted for 1.55% of the financial institution’s mortgage mortgage guide on the finish of July, or 23.6 billion yuan ($3.44 billion) of excellent mortgages. Overdue loans accounted for simply 0.03% of complete mortgage lending.
The lender reported a 1.46% non-performing mortgage ratio on the finish of the second quarter in comparison with 1.47% on the finish of the earlier one.
“Because the starting of this yr, below the context of modifications unseen in a century intertwined with unprecedented pandemic outbreak, the complexity, severity and uncertainty encountered by the nation’s financial setting have elevated with extra dangers and challenges,” BoCom stated in an announcement to the Hong Kong inventory change.
BoCom reported a 4.8% rise in first-half internet revenue regardless of what it known as the unprecedented coronavirus pandemic.
Revenue rose to 44.04 billion yuan for the January to June interval from 42.02 billion yuan a yr earlier, the financial institution stated in its assertion.
Internet curiosity margin (NIM) – a key indicator of profitability – was 1.53% on the finish of June in contrast with 1.56% on the finish of March, although vice chairman Guo Mang warned that industrial lenders face downward strain on their NIM.