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Chinese banks hit by bad property debts, lending margin squeeze

Headwinds facing financial system highlighted as earnings season begins

Nonperforming property loans more than doubled last year at several Chinese banks.   © AFP/Jiji

HONG KONG -- The headwinds facing Chinese banks were highlighted this week, as financial groups released full-year earnings reports showing that lower interest rates squeezed their returns from lending while bad property debts surged.

The banks that kicked off earnings season said profits grew last year, but their results highlighted the difficulties facing Chinese authorities as they try to keep interest rates low in hopes of reviving the world's second-biggest economy.

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