China's Banks Face Property Support Challenges

China's banking sector is under pressure as the government urges banks to support struggling property firms, potentially leading to increased bad loans and low net interest margins. Lenders, including ICBC, are expected to provide unsecured loans to developers facing defaults, amounting to an estimated $89 billion in bad real estate debt provisioning for 2024. The sector is also facing job cuts and record low valuations for big state banks. Despite relief measures, the margin squeeze is expected to intensify, impacting earnings and raising concerns about national service and credit risks.