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Effect of COVID-19 on non-performing loans in China
Lawrence Kryzanowski1, Jinjing Liu2, Jie Zhang3
1John Molson School of Business at Concordia University, 1455 De Maisonneuve Blvd West, Montreal, QC, H3G 1M8 Canada.
Abstract:
We examine the resilience of Chinese banks during the COVID-19 pandemic by investigating non-performing loan (NPL) ratios. We find that despite the reduction in the growth rate of total bank lending, bank NPL ratios significantly increase during the COVID-19 crisis. Banks with high-quality capital are more effective in controlling their NPL ratios during the Crisis. Big Five banks, state-owned banks and domestic banks have lower NPL ratios than their counterparts during the Crisis.
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