Chinese sales of bonds backed by bad bank loans hit new high

    
 

Chinese sales of bonds backed by bad bank loans hit new high
 

 Flurry of issuance fails to reassure investors worried about credit quality.

Chinese banks are increasing their sales of bonds backed by bad debts, but the market's growth has yet to ease investor concerns about the quality of assets held by lenders in Asia's biggest economy. 

Issuance of securities that promise investors the returns from non-performing loans hit a record 47.7 billion yuan ($6.71 billion) in 2023, up 54% from the previous year, according to S&P Global (China) Ratings.

 Chinese banks have been allowed to sell bad-debt products since 2016. Such securitizations surged in 2020 as the COVID-19 pandemic ravaged the Chinese economy. The more recent increase came as China's property woes spread and consumers struggled to pay back credit card debts.