Comments from Xuanlai He, credit analyst at Commerzbank in Singapore

  • Banks are increasingly using trusts or asset management plans to lend
  • Recording them as funds to be received rather than as loans, which are subject to stricter regulatory oversight and capital limits
  • Commerzbank AG estimates may result in losses of as much as 1 trillion yuan ($153 billion) over five years
  • "Chinese banks haven't provisioned for receivables and those are essentially riskier loans"
  • "The eventual losses will have significant impact on China's economy because you could have contagion risk in banking sector'

via Bloomberg