Dismal Data: NPL Ratios Rise, HK Sales Fall

Want China: Several Chinese provinces' bank NPL ratios approaching 2%

At a time when profits were declining sharply in the first half, Guangxi's banks' NPLs had been rising quickly, reaching 34 billion yuan (US$5.45 billion) as of the end of June, up 40% compared with the end of January, with the NPL ratio rising 0.49 of a percentage point to 1.96% from end-January.

...Shanxi's banks' NPL had reached as high as 4.5% due to serious overcapacity in the coal and steel industries, said one unnamed senior executive at China Merchants Bank on June 19. Shanxi regulators have yet to unveil any related statistics.

Shanxi is one of the rust belt provinces in recession.

FT: China’s banks face tightening bad loans squeeze

The country’s big four state-controlled banks — Agricultural Bank of China, ICBC, Bank of China and China Construction Bank — reported only marginal gains in net profit for the first half of the year, while official measures of non-performing loans surged.

...ICBC, the world’s biggest banks by assets, warned that the “risks of illegal fundraising and financial frauds are spreading to the banking system” as it reported a 28 per cent increase in non-performing loans compared to the previous six months.

The bank’s NPL ratio rose to 1.4 per cent as of end-June, from 1.29 per cent at the end of March, while Bank of China’s rose to 1.4 per cent from 1.33 per cent and Agricultural Bank of China’s hit 1.83 per cent from 1.65 per cent. The ratio for CCB rose to 1.42 per cent from 1.19 per cent at the end of last year.

Take those numbers with a grain of salt because there are many Tricks For Hiding NPLs.

Finally, SCMP: Falling sales in Hong Kong and China bank concerns all indicators of darker times to come

Swire Properties, a subsidiary of conglomerate Swire Pacific, said sales at its upmarket Pacific Place mall dropped 12 per cent in the first half and warned there is no sign of a pick up in the luxury retail sector.

Footfall fell 7.2 per cent at Lifestyle International's Sogo department store in Causeway Bay.

...At cosmetic retailer Sasa, second-quarter turnover fell 8.6 per cent to HK$1.8 billion. The firm blamed a "deteriorating" market environment for "putting more pressure on the group's earnings". Jewellery group Chow Tai Fook's second-quarter sales slipped 6 per cent, weighed down by sluggish business at its Hong Kong and Macau stores.