Credible estimates suggest that the losses on nonperforming loans exceeded 40%-50% of China's GDP.
Its institutions are loaded with nonperforming loans that were issued for political, not economic, reasons.
China's extraordinary lending boom already is raising the specter of another nonperforming loan crisis like the 1990s.
Nonperforming loans accounted for 2.7% of Equity's total portfolio, according to the company's most recent quarterly statement.
Estimates of the percentage of nonperforming loans in China's Big Four banks run between 25% and 40%.
And the banks, acting as intermediaries between savers and investors, were left with heaps of nonperforming loans.
Many of the new loans will end up as nonperforming assets on the books of the state banks.
It's true that China's public-sector debts and deficits and the nonperforming loans of the state banks are grossly underestimated.
Example: A third of the bank's loans to Greece's shipping industry were nonperforming.
In addition, the earnings surprise news masks a jump in Comerica's nonperforming loans.
It said in the prospectus that part of the proceeds would be used to buy subperforming and nonperforming residential-mortgage loans.
One nearly inevitable consequence was a rise in nonperforming loans sharp enough to threaten the viability of the Chinese banking system.
The ECB urged banks to make "adequate provisions" against nonperforming assets "as well as any other foreseeable expense, " such as litigation costs.
One likely result: a massive increase in nonperforming loans at Chinese banks.
Illiquid and nonperforming debt held by financial institutions from these countries can, with the Brady bonds, be converted into sustainable, performing debt.
This then allows the financial institutions to get the nonperforming asset off their balance sheets and replace them with new assets.
The bank's nonperforming assets are rising, but at a recent 0.38% of total assets they are much lower than the 0.74% year-end industry average.
The company nearly collapsed by the 1990s due to management shortcomings, a downturn in the nation's banking sector and nonperforming loans topping 54% of its portfolio.
More ominous, its financial system is on the brink of disaster as its banks, including the large ones, reel from the catastrophically growing volume of nonperforming loans.
But it generated a long list of consequences, including massive credit expansion, large local government borrowing, asset bubbles, potential nonperforming loans and overcapacity in some infrastructure areas.
And the Shanghai branch of Huaxia Bank has been exposed by a government audit in a scheme to underreport its nonperforming loans, according to Chinese news reports.
No one knows the extent of the problems in these financial institutions, but the central government's statistics showing single-digit nonperforming-loan ratios have a too-good-to-be-true quality to them.
Nonperforming assets fell 24% to the lowest level since 2008.
For one thing, they are avoiding making long-term loans, a sign of funding difficulties, probably caused by the nonperforming assets they have been carrying on their balance sheets.
Additionally, Wells continues to slough nonperforming loans from its assets.
For instance, Spain's La Caixa savings bank may use Broadcaster to reach all 4, 000 branches with alarms about nonperforming loans or with prospect lists for some new marketing push.
More significant may have been policies aimed at keeping corporate borrowing rates low to slow the growth rate of nonperforming loans, and deposit rates even lower to ensure bank profitability.
This risk is mitigated by the current moderate level of nonperforming loans (1.1% of total lending), larger provisions for bad loans, and more stringent bank capital-adequacy requirements in recent years.
The China Banking Regulatory Commission announced that the nonperforming loan ratio for all banks was 1.14% at the end of last year, but that number hides more than it reveals.
Investors fear that the same lax lending standards that caused banks to write down nonperforming home loans, will cause a second wave of weakness, as defaults increase on commercial mortgages.
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