BEIJING, Jan 7 (Reuters) – China’s financial regulator has extended a policy allowing banks to transfer bad personal loans in bulk until the end of this year, said two sources with knowledge of the matter, as lenders grapple with rising consumer loan defaults and credit card delinquencies.
The National Financial Regulatory Administration (NFRA) issued a notice enabling banks and asset management companies to continue transferring and disposing of non-performing personal loans through end-2026, they said. The programme was due to finish at the end of 2025.
The sources declined to be named as they were not authorised to speak to the media. The NFRA did not immediately respond to Reuters’ request for comment. Bloomberg first reported the extension.
The policy, first introduced in 2021, was initially restricted to six state-owned banks and 12 joint-stock banks, with other lenders to handle non-performing personal loans through self-collection or write-offs.
The programme was expanded in late 2022 to include policy banks, some regional banks, trust companies and consumer finance firms.
The move shows Beijing’s efforts to give banks more breathing room to manage deteriorating asset quality in a slowing economy hit by a debt crisis in the property sector and sluggish consumption.
Bad loan ratios on personal loans, which account for about 30% of the total loan book of state banks, have been rising. Chinese banks have accelerated their disposal of soured loans as profit margins hit record lows.
Industrial and Commercial Bank of China (ICBC), the world’s largest commercial bank by assets, reported its non-performing ratio for personal consumer loans rose to 2.51% at end-June, up 0.12 percentage points from end-2024.
The bank’s credit card delinquency rate reached 3.75% at end-June, a 0.25 percentage point increase.
Transfers of personal bad loans under the programme surged to 107.6 billion yuan in the first half of 2025, more than double from the same period in 2024, state-run Securities Times reported.
(Reporting by Beijing Newsroom; Editing by Lincoln Feast.)
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