Thanks to Wayne and others for the confirmation of this news which I had found and added to my last post.
China’s biggest banks tripled the amount of bad loans written off in the first half of the year, cleaning up their books ahead of what may be a fresh wave of default.
The five biggest lenders have sought to curb credit risks. By the end of June, they had set aside an average 272% of the value of their soured debt as provisions, surpassing the regulator’s 150% requirement.
A separate threshold that calls for their loan-loss reserves to exceed 2.5% of total credit may become a tougher goal following the debt write-offs — which also reduce provision levels — and force the banks to set aside more funds
More from Bloombergs here
The news has been out for a while but took a little while to filter through, fuelling the rumour mill and exacerbated by stop- loss selling/ profit taking as markets have been caught on the wrong side.
