A bit of a catch-up on this. From Reuters:

Mounting bad loans are running down Chinese banks' capital buffers

  • Commercial banks are issuing preference shares as well as convertible and perpetual bonds to shore up their capital base
  • Bad loans up 30 percent in the first half of 2015 according to China's banking regulator
  • "China is facing a systemic credit crisis," said Jim Antos, banking analyst at Mizuho Securities in Hong Kong. "Chinese banks, until mid 2014, were able to cope with deterioration of loans. It seems that has changed."

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More at Reuters

more PBOC easing on the way, anyone?