WSJ on 'China’s Banks Are Hiding More Than $2 Trillion in Loans'

Author: Eamonn Sheridan | Category: News

As if loan growth in China is not fast enough, there are rising amounts of hidden loans adding to it.

Banks are calling some lending an "investment receivable" on their balance sheet. Doing so allows banks to set aside little or nothing for potential losses.
  • As of June, 32 publicly traded Chinese banks had a total of $2 trillion in investment receivables as of June, up from $334 billion at the end of 2011, according to a tally by The Wall Street Journal of the latest available information from data provider Wind Information Co.
Bolding mine.
And ...
  • The investments are equivalent to 20% of the same banks' total loans in dollar terms
  • Up from 6% at the end of 2011
Yikes.
 The Journal article is here, may be gated: China's Banks Are Hiding More Than $2 Trillion in Loans



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