Bad loans rise at Chinese state banks

Bad loans rise at Chinese state banks ahead of $69bn capital injection

SHANGHAI/HONG KONG -- Interest margins fall to record lows amid deflationary pressure. China's "big four" state banks have been under pressure for years, since tighter rules triggered a property downturn that has sapped consumer confidence.

 Bad loans ticked up, interest margins shrunk and consumer loans were stagnant at China's biggest state-owned banks in 2024, underscoring mounting challenges facing the financial sector as the government readies a 500 billion yuan ($69 billion) capital injection.

Executives at China's "big four" state lenders -- Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China -- said net interest margins (NIMs) will continue to come under strain this year as the central bank plans further rate cuts to battle deflationary pressure.