China’s banks cut bad debt buffer as profits flatline

A man speaks on the phone outside the Bank of China head office building in Beijing, China in this March 30, 2016 file photo. REUTERS/Damir Sagolj/File photo

THREE of China’s Big Five lenders say they cut their loan-loss allowance ratio to around 150%, an indication the country’s banking regulator may be lowering the amount of cash some banks need to set aside for future losses.

For China’s big commercial banks, the move allows lenders to report stable earnings, even as the volume of bad loans rise and revenue from traditional lending declines, analysts say.