China Banks in Danger Of $350 Billion Loss from Property Crisis


Confidence sinks in China’s property markets as the nation’s banks experience mortgage losses of $350 billion and authorities find it difficult to tackle the chaos.

A long list of delayed projects has affected the confidence of several homebuyers, setting a mortgage boycott across more than 90 cities and warnings of broader systemic risks. The question in the market is how much it will batter the nation’s $56 trillion banking system.

S&P Global Ratings estimated that 2.4 trillion yuan ($356 billion), or 6.4% of mortgages, are at risk, while Deutsche Bank AG warns that at least 7% of home loans are in danger. So far, listed banks have reported just 2.1 billion yuan in delinquent mortgages directly affected by the boycotts. 

Zhiwu Chen, a professor of finance at the University of Hong Kong Business School, said, “Banks are caught in the middle. If they don’t help the developers finish the projects, they will end up losing much more. If they do, that, of course, would make the government happy, but they add more to their exposure to delayed real estate projects.”

Apart from slow economic growth, Covid disruptions, and record high youth unemployment, Beijing is placing financial and social stability at the top of its priorities.

Efforts that have been contemplated so far included a grace period on mortgage payments and a central bank-backed fund to lend financial support to developers. Either way, banks are expected to be the playmaker in changing the nation’s financial director. 

Important Link

Fund Your Deriv Account
Withdraw Funds to Your Local Currency
VIP Trading Signals
Learn To Trade

Contact Us

Follow Us


Forex, Crypto, Options, and Binary Options have both large potential rewards and large potential risks. Therefore, before investing or trading any of the assets, ensure you are aware of and willing to accept the accompanying risks. Do not trade money you cannot afford to lose.

All Rights Reserved. None of the content of this website can be published elsewhere by any means without the prior consent of the owner(s). Please, check our terms & conditions and privacy policy before continuing to use this website.

This website and its owner(s) are not in any way liable for any incurred loss, whether caused by the information provided on this website or otherwise. The use of this website, including the content and information provided, is the user’s sole liability.