China Banks Face $200 Billion in Losses From Property, UBS Says
- Sector stabilization ‘critically important’ to prevent losses
- UBS analyst sees much stronger central government support
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China’s property slump is estimated to cost the nation’s banking system as much as 1.5 trillion yuan ($212 billion) in losses on loans, bonds and other assets, according to UBS Group AG.
Such a loss will be “digestible by the banking system as the banks have strong earnings power and high” reserves against non-performing assets, May Yan, the bank’s head of Greater China financials equity research, said in a report. “As such, we don’t expect any banking system crisis at this point.”