(Yicai Global) April 28 -- Increment of non-performing mortgages for homebuyers at 12 of China’s listed banks surged 13.2 times last year from the year before as economic pressures make it harder for people to repay their loans.

The 12 banks added CNY47 billion (USD6.8 billion) in bad personal housing loans in 2022, bringing the total to CNY130 billion (USD19 billion), according to their latest financial reports.

Of these, China Construction Bank’s non-performing personal housing loans increased CNY11 billion (USD1.5 billion), 7 fold to that in 2021, and Industrial and Commercial Bank of China added nearly CNY10 billion, a big jump from 2021’s decrease of CNY700 million (USD101.2 million).

Since 2021, it has become more difficult to dispose of foreclosed housing at auction as real estate prices slide. In order to reduce risks, a number of banks said that they will concentrate on issuing mortgages, normally one of their safest assets, in large cities.

Non-performing housing loan ratios at 15 banks, which released the relevant statistics, advanced 0.2 percentage point in 2022 year on year to 0.57. Zhengzhou Bank has one of the highest ratios at 1.65, an increase of 0.69 point.

While China Construction Bank and ICBC, which have the biggest amount of individual housing loans, saw their non-performing mortgage ratios reach 0.37 and 0.39, respectively, a year-on-year gain of 0.17 and 0.15 points.

Due to the slowdown in economic growth, China Merchants Bank’s bad housing loan ratio climbed 0.07 point to 0.35, it said. But because there is sufficient collateral and because over 70 percent of mortgages are not overdue, overall risks in the personal housing loan market remain controllable.

Yet, fewer individual housing loans are being issued. The country’s personal mortgages expanded just 1.2 percent last year from the year before, growing in the single digits for the first time in nearly 10 years, to CNY38.8 trillion (USD5.6 trillion), according to the People’s Bank of China.

Editor: Kim Taylor