In this last installment of the household debt series, we review major listed Chinese banks, to assess recent household credit growth and the potential impact of the virus-related economic fallout. Overall, the COVID-19 outbreak should slow household credit growth this year, despite Beijing’s monetary easing measures. Banks with heavy exposure to retail borrowing, especially joint-stock banks that have led in credit card lending, and rural commercial banks that have expanded household operating loans, will likely see more delinquencies. Regulators’ forbearance measures may help banks postpone recognition and provisioning for non-performing loans, but these assets will remain on banks’ balance sheets, and will amplify capital pressure on China’s commercial banks.
