In the midst of a surge in non-performing loans in mainland China, bank branches are also rapidly exiting the market. Data shows that in the first five months of this year, 1257 bank branches have already exited the market, leading to concerns among the public that a wave of bank bankruptcies is imminent.
According to a report by “The Paper” on June 7th, based on data disclosed by the China Banking and Insurance Regulatory Commission, a total of 1257 bank branches have exited the market by May 2024, representing a 30.41% year-on-year increase.
Among the exiting bank branches, rural commercial banks and agricultural credit institutions have a significant presence. Specifically, 527 rural commercial bank branches have exited, accounting for 41.93%, and 266 rural credit cooperatives and their branches have exited, representing 21.16%.
The number of exiting branches from state-owned major banks, joint-stock banks, city commercial banks, and rural banks are 227, 94, 82, and 34 respectively, accounting for 18.06%, 7.48%, 6.52%, and 2.7%.
Additionally, 16 foreign banks, 6 policy banks, and 5 rural cooperative banks have also exited the market.
At the same time, the number of newly established bank branches has decreased. Only 894 bank branches were set up in the first five months of this year.
Netizens commenting on this development have expressed concerns about an impending bank bankruptcy crisis.
As the economy on the mainland of China deteriorates, the problems faced by banks are increasing. In addition to branches exiting the market, the level of non-performing loans in banks is also on the rise. A report by “The Economist” on March 27th pointed out that hundreds of banks in China are experiencing a surge in non-performing loans, posing as time bombs that could have unpredictable consequences when they explode.
Moreover, there was a recent bank crisis incident at a rural bank in Henan, where depositors’ rights were violently suppressed by the Chinese Communist Party. Chinese-American economist Li Hengqing, speaking to “The Epoch Times,” mentioned that there are over 4,000 small and medium-sized banks like the one in Henan, indicating that the next wave of crises can quickly spread to these banks. Events similar to the Henan rural bank incident will likely occur one after another, ushering in a Chinese version of the Lehman moment, moving into the final countdown stage.