China’s credit card sector reportedly hit by a spate of bad debts.
A recent survey conducted by China-based Internet technology company – NetEase – came out with a report on June 5, 2014. The survey’s findings have stated that the nation’s credit card sector is in some serious trouble.
The number of credit cards keeps multiplying in China. Along with the growth of credit cards, the figures in terms of overdue payments and non- performing loan ratios for credit cards is also increasing.
The People’s Bank of China said that the central bank has showed credit card debts are at least six months overdue and has increased to 25.19 billion Yuan by the end of 2013 – a 71.86 % increase from 2012.
On an average the credit card NPL ratio of about 9 elected commercial banks was 1.44 % in 2013. This has marked an increase of 0.16 percentage points over the figures of 2012. The number was also higher than the average NPL ratio of 1 % for the commercial banks by the end of December 2013.
The survey further states that out of 30,365 credit card users in April and May 2013, about 16 % of them experienced less credit scores in the past two years due to overdue payments. 30 % of the users said that they could just make the minimum payments.
This precarious situation has led to an increasing number of bad debts in China’s credit card industry.
Photo credits: The Epochtimes