The non-performing loan ratio in Macao’s banks is continuing to grow, with government statistics revealing that the figure edged up from the 5.5 percent recorded last November and December to 5.7 percent in January.
The overall value of bad debts during the initial month of this year was 57.58 billion patacas (US$7.2 billion).
The current result sets a new 20-year high for the city’s non-performing loan ratios, behind the 6.4 percent record that was logged back in August 2004.
Prior to the Covid-19 pandemic, in late 2019, Macao’s non-performing loan ratio remained relatively low, hitting a range between 0.1 percent and 0.4 percent.
The economic turmoil caused by the virus, however, has seen the city’s troubled loan level rise significantly from 0.3 percent at the beginning of 2020 to 4 percent in January 2024.
[See more: Macao’s loan delinquency rate continues its 20-year high as SME credit plunges]
Government data also shows that the ratio of delinquent loans among small and medium-sized enterprises (SMEs) during the second half of 2024 hit 6.2 percent, the highest rate since 2008. In total, SMEs owed some 4.87 billion patacas (US$610 million) in bad loans.
Despite the growing amount of bad loans, Lau Hang Kun, an official with the Monetary Authority of Macao, told local media last month that the SAR’s other banking indicators were performing well.
Lau cited the sector’s consolidated capital adequacy ratio, which reached roughly 15.5 percent in the fourth quarter of 2024, a figure that she said exceeds the international standard.
On the surging non-performing loan rate, Lau stated that it was the result of external and internal factors such as the delayed impact of the pandemic, which has weakened the economy and diminished the desire of businesses to take out loans in a high interest environment.
Other reasons include the slump in Hong Kong and mainland China’s property markets, which have impacted the asset quality of Macao’s banks.
