China Merchants Bank Flags Property-Related Credit Risk

China Merchants Bank Vice President Xu Mingjie said the main future risk in corporate lending remains in real estate credit, as the property market is gradually stabilising but regional and company-level divergence remains pronounced. Some lower-quality borrowers could still face risk exposure, according to ETNet. Xu said retail loan quality is likely to remain under pressure in the near term, although the bank will continue to treat retail lending as an important asset allocation. He said that amid economic restructuring and property market adjustment, some customers' repayment ability and willingness are still affected, while risks from borrowers taking loans from multiple financial institutions at the same time in consumer credit markets remain on an upward trend. China Merchants Bank President Wang Xiaoqing said the bank faces both industry-wide challenges and structural challenges specific to its retail-focused business model. He cited pressure on net interest margins in a low-rate environment and weaker loan demand as economic growth slows and the financing structure of society changes. He also said the bank's retail business and retail assets are facing temporary challenges as household balance sheets are being restructured, with deleveraging and weaker repayment willingness and ability among some customers.