Retail Sector Has Highest NPL Ratios

This report by debt analyst Jiang Chao of Haitong Securities calls manufacturing a disaster area, but its NPL ratio is around 4% versus 7% for retail/wholesalers. Perhaps banks don't use as many tricks to suppress bad retail debts?

3.4 Risk 2.4: wholesale and retail, manufacturing industry is the hardest hit

Wholesale and retail industry, the main source of manufacturing or non-performing loans for 15 years and produced.

Among them, the wholesale and retail sectors most sensitive to the transfer of the money, the economy continues downward, industry revenue low boom exacerbated the difficulties of enterprises, increasing accounts receivable mean the weakening of the industries and enterprises solvency. For the purposes of the four major state line, wholesale and retail of non-performing loans ratio of about 7%, of which a maximum of about 7.82% Agricultural Bank of China, China Construction Bank and Industrial and Commercial Bank of China about 7.09% and 6.09% respectively. At the same time, the manufacturing sector is also a hit, CCB and ABC's non-performing loans in the industry rate of over 4%, which is high labor-intensive textile and clothing NPL ratio.
No surprise at the lowest NPL industries, utilities:
Transportation, storage and postal services, electricity, heat, gas and water production and supply industry, as well as the lowest non-performing loan ratio in water conservancy, environment and public facilities management industry, currently the average less than 0.5%, or derived from such industry has a stable cash flow. With the development of steady growth policies, such industry will continue to reduce risk.
Numbers are worse in the Pearl River Delta: China Construction Bank's division there saw its small and medium enterprise NPL ratio break 2% at the end of June, and then climbed to 2.41% by the end of September. Not as bad as the recessionary Northeast though.
In addition, the Northeast region is still the focus area of non-performing loans of individual banks, such as China Construction Bank and China CITIC Bank
Weakness is in corporate debt which is rapidly deteriorating:
Bad corporate loans was significantly higher, and the deterioration of rapid growth.

First, the company is higher than the non-performing loans of commercial banks overall non-performing loan rate of nearly 60BP, such as the Agricultural Bank report shows 15-year corporate NPL rate of 2.43%, while non-performing loans only point of the Agricultural Bank 1.83%. Construction Bank NPL ratio of corporate loans is also more than 2%, while the Construction Bank non-performing loans is only 1.42%. Secondly, the rate of deterioration in bad corporate loans quickly, with state-owned banks, for example, the rate of about six months between the upstream reach 35-40BP.

NPL ratio of personal loans is more stable.
The conclusion of the report:
We expect that the real NPL ratio in 2016 will accelerate upward, need to guard against credit risk of individual regions and individual sectors outbreak.

This report was the top headline in the iFeng finance section. A day earlier, a report by Industrial Bank was in the top spot, it's headline was Hope For China's Economy Smashed To Pieces.

iFeng: 2015年中国不良贷款率四大风险点暴露(名单)

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