Most of the largest banks in China increased their provisions against bad loans while asset quality improved. Our Investment Research expert Avishek Suman elaborates on the banks’ possibility to implement more stringent audit standards for new projects due to the increased NPL ratio.

Extract from the article: “Banks' real estate-related NPL ratio increased in the first half of 2021, and pressures from policies on the real estate sector are expected to remain, forcing banks to optimize their quality of assets in the fourth quarter… Currently, all big domestic banks are actively complying with instructions from the government… As for the problems banks are already exposed to, they would evaluate and recognize the impairment in advance to minimize risks”