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The Bank of Communications says it is able to withstand a 50 percent drop in home prices.
The outcome from the latest stress test suggests the lender's retail bad loan ratio would increase only 1.2 percent, if housing prices tumble 50 percent. Meanwhile, its corporate banking non-performing loan ratio will rise by 1.6 percent under the same circumstance. Vice executive president Qian Wenhui says, the bank's real estate loan risks are under control.
In August, China's banking regulator asked banks to conduct a new round of stress tests, which takes into account a worst case scenario of a 50 percent decline in housing prices.