Asia's Spreading Loan Mess
CHINA: Economists estimate that as much as 40%, or $240 billion, of the state banks' loan portfolios are worthless. Beijing is pressuring these lenders to channel even more money into money-losing state enterprises.
THAILAND: The recent default by Somprasong Land development on an $80 million Eurobond issue has set off alarm bells. A property bust has left Thai commercial banks with $15.5 billion in nonperforming loans--and that number is growing.
TAIWAN: A bombed-out property market and inefficient provincially owned banks, which control 40% of all lending, are holding the economy back. Lenders have made few provisions against bad debt write-offs.
INDONESIA: Nearly 20% of the loans at seven state-owned banks, which represent half of the nation's banking assets, look shaky. Business cronies of President Suharto are among the biggest and most delinquent borrowers.
JAPAN: Lenders have at least $216 billion in bad loans--and the total could be closer to $366 billion. Markets have been shaken by rumors that Nippon Credit Bank, one of Japan's top 20, is in trouble.
SOUTH KOREA: The biggest banks are heavily exposed to the collapse of the Hanbo Group, a giant steel and construction conglomerate. All told, banks have $11 billion in bad loans.
Updated June 15, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.