China's property crisis hits small regional banks harder than big players

Northeastern institutions suffer sharp increases in bad loans to developers

20240408 A construction site of residential buildings

A residential construction site in Dalian, Liaoning province. The pressure on banks in China's northeast is acute as the country grapples with a prolonged real estate slump. (China Daily via Reuters)

ECHO WONG, Nikkei staff writer

HONG KONG -- China's property crisis is taking a particularly heavy toll on small banks in low-growth provinces, as bad debts to developers erode their finances.

The growing pressure comes in stark contrast to upbeat statements by large national banks, which said in recent earnings conferences that they see positive signs on demand and the direction of the economy -- echoing the optimistic notes the Communist Party leadership has been emphasizing.

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