Most commercial banks can endure at most a decline of 40 percent in housing prices, according to a round of stress tests on real estate loans initiated in late April, the 21st Century Business Herald reported Tuesday.
The newly released test results showed that Industrial Commercial Bank of China and China Construction Bank could handle a maximum of 35 percent decrease in housing prices, Bank of Communications could endure 30 percent and Agricultural Bank of China, which aimed to be listed, could take only a 20-percent decline.
As for the joint stock banks, the maximum for China Minsheng Banking Corp and China Merchants Bank were 40 percent and 37 percent, respectively.
A source with a joint stock bank told the newspaper that unlike the previous stress tests, this time, some commercial banks also took the correlation between real estate loans and local financial platforms into account, while some banks considered the uncertainty of future government policies, such as the possible property tax.
