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China bank balance sheets put to test by coronavirus impact

Lenders to have to set aside billions more in capital to cover soured loans

HONG KONG -- Chinese banks are at risk of having to set aside billions of dollars more to cover loans that have gone sour due to the coronavirus pandemic, complicating Beijing's attempt to reignite the economy.

Analysts expect China's big listed banks to make much higher bad-loan provisions on their balance sheets as a result of accounting standards implemented since the 2008 financial crisis. Higher provisions will squeeze profits and capital levels, restricting banks' ability to lend to stimulate the economy.

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